A U.S. District Court judge in Texas has ruled that Bitcoins are officially a form of currency. The ruling came in response to a motion to dismiss a Bitcoin-focused fraud case because the defendant said Bitcoins weren’t actually real money.
Texas resident Trendon Shavers is accused of scamming would-be investors in his Bitcoin hedge fund, Trendon Shavers of Bitcoin Savings & Trust (BTCST) . Shavers collected as much as $4.5 million in Bitcoins from investors with the promise of a respectable 7% return.
The only problem was that Shavers wasn’t exactly respectable himself and had no intention of paying his investors back.
When the SEC charged him with fraud, Shavers countered that he couldn’t commit fraud with Bitcoins because they’re not a real currency. Magistrate Judge Amos Maazant of the Eastern District of Texas federal court disagreed with Shavers in his ruling saying:
It is clear that Bitcoin can be used as money. It can be used to purchase goods or services…The only limitation of Bitcoin is that it is limited to those places that accept it as currency. However, it can also be exchanged for conventional currencies, such as the U.S. dollar, Euro, Yen, and Yuan. Therefore, Bitcoin is a currency or form of money…
What’s important/interesting about Maazant’s ruling is the he treats Bitcoins more like a commodity currency like gold rather than a traditional currency like the Euro.
Whether the ruling, and its new found official legitimacy, will be good or bad for the Bitcoin world remains to be seen.
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