Criminals who deal in bitcoins in Florida could soon be busted for money laundering. Florida lawmakers are poised to pass a bill that will add “virtual currency” to the state’s money-laundering statute, a change hailed by law enforcement although frowned upon by some enthusiasts of bitcoins. The proposed law was crafted after a Miami judge tossed a criminal case against a Miami Beach man accused of selling $1,500 worth of bitcoins he believed was to be used to buy stolen credit-card numbers online. The bill, which is being considered during the ongoing annual legislative session in Tallahassee, was crafted with help from Miami-Dade cyber-crimes prosecutors. “The high-tech criminals of the 21st Century use virtual currencies like bitcoin to accumulate and hide the profits of their illegal activities,” Miami-Dade State Attorney Katherine Fernandez Rundle said in a statement. “This legislation makes sure that traffickers and fraudsters can no longer try to use internet-based currencies to hide and move their ill-gotten gains.’’ AP Explains-Bitcoin In this April 3, 2013 photo, Mike Caldwell, a 35-year-old software engineer, holds a 25 Bitcoin token at his shop in Sandy, Utah. Bitcoin is an online currency that allows people to make one-to-one transactions, buy goods and services and exchange money across borders without involving banks, credit card issuers or other third parties. Rick Bowmer AP File Photo But critics say the law could deliver a chilling effect on the bitcoin, which can be valuable in promoting commerce between Florida and countries such as Venezuela, where traditional banking systems have gone awry. “Florida legislators will be sending a very clear signal that financial innovation is not welcome here,” said Charles Evans, a Barry University economist who specializes in Bitcoin. “No doubt, officials in China, Europe, Russia, Texas, and other places where Bitcoin is welcome will be pleased.” So far, a House version of the bill – sponsored by Miami Rep. Jose Felix Diaz – passed unanimously through an appropriations committee last week. A Senate version has passed two sub-comittees and is awaiting a vote in an appropriations committee. Authorities across the United States have struggled to figure out how laws apply to Bitcoin, which allows some users to spend money anonymously and can also be bought and sold on exchanges with U.S. dollars and other currencies. Digital currencies allow people to make one-to-one transactions, buy goods and services and exchange money across borders without involving banks, credit-card issuers or other third parties. Regulated services such as CoinBase, which operates similarly to PayPal, allow people to buy, sell and use bitcoins. Authorities have raised concerns about the currency – which can be bought and sold through private users – being used in the anonymous black market. The currency has gained popularity with merchants selling legitimate goods and services, everything from Dell to Expedia to Overstock.com. In Miami, there are a handful of restaurants that accept the virtual currency, including the popular South Beach hotel and club, The Clevelander. But the currency has also been used for more nefarious reasons. Bitcoins was most famously used to help traffic drugs in the now-shuttered Silk Road “dark web” online network. In an unrelated South Florida case, a Miramar man got 10 years in prison after using Bitcoin to buy Chinese-made synthetic heroin from a Canadian prisoner. When major credit card companies stopped accepting business from Backpage.com over concerns about ads for the sex trade, the classified website turned to bitcoins. Prostitutes – and human traffickers – learned to buy bitcoins to purchase the ads. Under current Florida law, money laundering can apply to host of financial transactions designed to hide funds earned through criminal activity, or further that activity. That includes bank deposits, wire transfers and even investments. If the law passes, “virtual currency” will be added to the definition of “monetary instruments” covered under Florida’s Money Laundering Act, which would then be defined as a “medium of exchange in electronic or digital format that is not a coin or currency of the United States or any other country.” South Florida lawyer Andrew Hinkes said that under the proposed law, prosecutors will still need to prove intent – that someone knew they were changing money for bitcoin or bitcoin for money to either hide dirty money, or further a future illegal transaction. “I don’t think it would affect the day-to-day users of bitcoin, or investors who hold bitcoin,” Hinkes said “But it might affect the business of those who exchange bitcoin for dollars. Now, assuming the facts support the intent required by law, the path to prosecution of traders for money laundering is clearer in Florida.” Miami Beach police thought they had made a solid case against Michel Espinoza, a website designer who was charged with illegally transmitting and laundering $1,500 worth of bitcoins. Undercover detectives met Espinoza through a Bitcoin exchange site called LocalBitcoins.com. As they bought the bitcoin from him, the undercover detectives told Espinoza they wanted to use the money to buy stolen credit-card numbers. Espinoza was arrested along with another man, Pascal Reid, who pleaded guilty to acting as an unlicensed money broker and was sentenced to probation. Under his unusual plea deal, Reid agreed to teach law enforcement about Bitcoin. But his defense lawyers challenged the prosecution, arguing that Bitcoin is not actually money under Florida law. At a hearing in May 2016, they told a judge that no central government or bank backs Bitcoin, like the United States does the dollar. Government regulation of Bitcoin remains a messy hodgepodge from state to state, country to country and the IRS considers Bitcoin deals no more than bartering, he said. “Basically, it’s poker chips that people are willing to buy from you,” testified Evans, of Barry University. In a decision that was closely watched by the virtual currency community, Pooler agreed – throwing out the criminal charges against Espinoza. “This court is unwilling to punish a man for selling his property to another, when his actions fall under a statute that is so vaguely written that even legal professionals have difficulty finding a singular meaning,” she wrote. Miami-Dade prosecutors are appealing the ruling. http://www.miamiherald.com/news/local/community/miami-dade/article146087044.html
I have friends here in Canada that own a lot of Bitcoins and have been using it in the U.S. for the past few years whenever they travel there. I heard about this story from them before vanzandt posted about it and they're law biding...mainly use it in restaurants, traveling gear and electronics. I can say that they have some fear now of being targeted for using Bitcoins. They are now thinking twice before using their Bitcoins in the U.S. and feel more comfortable with using them Europe. In fact, most of them (6 couples and their kids) will no longer vacation in the U.S. because of the bitcoin issue (there's other stories that didn't make headlines) and will only now vacation in Europe or Asia.
This is double stupid: 1. When bitcoin is appreciating (like now) you don't want to spend it. 2. They still could use you know, money or CCs.
Physical US currency in the form of paper "greenbacks" is the single most liquid, anonymous means of conducting criminal activity. Not just in the US but world-wide. Bitcoin is chump change in comparison.
Lets put it this way, tell me what you would do with your bitcoins with a 10k investment and its now worth 60k along with the fact you're now retire and trying to enjoy the remainder of your life... Would you tell them not to spend it and to use money or credit cards or would you spend the bitcoins when you travel ??? P.S. I've already told them to spend it considering they don't have children to give it away too considering you can't spend it if you die.
I used to make a market on localbitcoins.com but got spooked by the fincen warning a while back pertaining to money service biz laws... so I quit. I would have had to register as a money service biz and collect customer info ect. I'm just a dude interested in the new tech and trying to provide liquidity to my local community not some drug dealer or sex trafficker lol. FinCen IRS CFTC SEC all have different definitions of bitcoin and how it is suppose to be handled. Very grey area. A lot of black market activity has moved to other coins like XMR that are not easily tracked...so good luck government.
Florida's Money Laundering Statute Won't Affect Most Bitcoin Users Florida's legislature is considering a bill that would add "virtual currency" to the definition of "monetary instruments" covered within its anti-money laundering (AML) statute. This proposed revision seems to be a direct reaction to the dismissal order in State vs Espinoza(which remains on appeal), and that would close a loophole in Florida's money transfer statute. But, however ominous it may sound, this change would only impact a fraction of virtual currency activities, so the new definition is likely to have a minor impact on its use in Florida. http://www.coindesk.com/floridas-money-laundering-statute-wont-affect-most-bitcoin-users/
wait, so guy sells his bitcoins to some detective that then lies about using them for some criminal activity? How is it my problem how someone uses a gun I sell them, especially on a hypothetical crime?
This will not stay like this. Bitcoins is used by all criminals. In most European countries and in Russia the amount of cash that can be used to buy things is limited. Buying a car or a house is impossible. Some limits: France 3000 euro Portugal 1000 euro Belgium 3000 euro Slovakia 5000 or 15000 euro (depending situation) Spain 2500 euro Bulgaria 5112 euro Greece 1500 euro