U.S. Supreme Court Will Face Growing Pressure on Bitcoin Issue
As various courts come to differing conclusions on how to classify bitcoins in their prosecution, the likelihood the Supreme Court will need to rule mounts
Bitcoins continue to play a more prominent role in crime circles for one simple reason: should one get caught, using bitcoins could shave years off a prison sentence. The ambiguity given by bitcoin, a decentralized electronic currency, offers at least the possibility of avoiding additional convictions should one eventually end up in front of a judge.
Now ultimately, the use of bitcoins will not allow a criminal to escape indictment completely. Most likely, the illegal actions surrounding the transfer of bitcoins (narcotics, fraudulent credit cards, etc.) will end up sending a defendant to jail. But many tech-savy criminals have gravitated to the electronic currency based on its decentralized nature that makes it less easy to monitor.
On Monday, a federal judge dismissed the claim that bitcoins are not a currency. The defendant making the claim has been linked to the hacking of JP Morgan in 2015, among other financial institutions. This same ruling was echoed by a federal judge in Texas.
However, the IRS does not count bitcoins as a currency, and therefore subjects it capital gains taxes. Additionally, a state judge, who in her decision bemoaned the inability of current state regulations to be correlated to cases such as those involving bitcoins, ruled that under current Florida law, bitcoins were not currency.
Historically, one of the surest ways to see a case appear before the Supreme Court is to have a variety of rulings on similar issues in lower courts. If the disparity in interpretations continues, the Supreme Court may ultimately be called on to offer a decisive decision.
It is clear that bitcoin is not a fleeting phenomenon. The currency offers all sorts of interesting implications when it comes to matters of decentralization, crowdsourcing financial transactions, and even the nature of the value of money. But all of the legitimate users of bitcoins who hope to see the currency’s popularity rise must hope for an authoritative ruling in the courts. Without one, bitcoins risk being viewed as the official currency of the black market and dark web.