New Florida Virtual Currency Bill to Target Bitcoin Money Laundering

Florida lawmakers are considering new legislation that aims to stop virtual currency dealers who participate in money laundering. The bill, sponsored by Miami-Dade Representative Jose Felix Diaz, has passed through the state’s House Appropriations Committee.

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Florida Lawmakers Target Virtual Currency Money Laundering

Monetary concealment and cryptocurrency is the latest topic for Florida legislators following the state’s money laundering lawsuit dismissal last year. The case involved Michel Espinoza, a man charged with illegal money transmission for selling $1,500 worth of bitcoins to undercover police. Espinoza’s case was dismissed because the judge considered bitcoins as a form of property. Miami-Dade officials are not pleased with the result of the Espinoza trial, and the state is appealing the judge’s decision.   

Now a bill sponsored by local bureaucrats and the Miami-Dade Cyber Crime Unit will define bitcoin as a “monetary instrument” and criminals using “virtual currencies” can be prosecuted for money laundering charges.

“The high-tech criminals of the 21st Century use virtual currencies like bitcoin to accumulate and hide the profits of their illegal activities,” explained Miami-Dade State Attorney Katherine Fernandez Rundle.

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.   

No Clear Bitcoin Definitions Across the U.S.

If the law passes, it will essentially add bitcoin to the current definitions of “monetary instruments” under Florida’s money laundering act. Current Florida statutes say “monetary instruments” are defined as coin, U.S. or foreign currency, and checks. Bitcoin and other virtual currencies do not fall into that category and that is the reason why the Miami-Dade judge dismissed the Espinoza case.

Each U.S. state is trying to figure out whether or not bitcoin is considered a currency or commodity. Currently, there is no general consensus on which definition to use, and this has made legal issues difficult. For instance, the U.S. Internal Revenue Service (IRS) defines bitcoin as a commodity or property. But in September of 2016, a federal judge based out of Manhattan declared bitcoin is money during a high-profile New York lawsuit.

In the New York criminal case against Anthony Murgio, Federal Judge Alison Nathan stated:

Bitcoins are funds within the plain meaning of that term — Bitcoins can be accepted as a payment for goods and services or bought directly from an exchange with a bank account. They therefore function as pecuniary resources and are used as a medium of exchange and a means of payment.

Money Laundering Intent Must Still Be Proven

A South Florida-based attorney, Andrew Hinkes, says the new bill will not give prosecutors an advantage as they will still need to prove money laundering intent.

“I don’t think it would affect the day-to-day users of bitcoin, or investors who hold bitcoin,” Hinkes explains to the Miami Herald. “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 the prosecution of traders for money laundering is clearer in Florida.”

The Senate version of the new bill will be facing an appropriations committee vote in the near future, as the House appropriations version has passed unanimously.

What do you think of the new virtual currency money laundering bill proposed in the state of Florida? Let us know in the comments below.

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