A recent Eleventh Judicial Circuit Court of Florida decision has raised concerns over how both federal and state courts consider the unregulated cryptocurrency, Bitcoin. In State of Florida v. Michell Abner Espinoza, Judge Teresa Pooler held that Bitcoin did not fall under the statutory definitions of “payment instrument” or “monetary instrument” because virtual currency is not directly specified nor could it be included within one of the defined categories listed in Fla. Stat. § 560.103(29) or 896.101(2). Furthermore, Judge Pooler, alluding to the doctrine of lenity, refused to hold Espinoza responsible under a statute that is “so vaguely written that even legal professionals have difficulty finding a singular meaning.”
Judge Pooler thus disagreed with earlier decisions by several federal judges. The federal courts have uniformly held that Bitcoin is “money” or “funds” for the purpose of money laundering. Additionally, the federal courts, analyzing the applicable federal money laundering statutes, have refused to apply the doctrine of lenity because there were no ambiguities such that “an ordinary person would [not] know that engaging in the challenged conduct could give rise to the type of criminal liability charged.” State and federal courts can interpret similar state and federal statutes in differing ways based on each statute’s respective canon of construction and legislative intent. However, because the Florida Money Laundering Act (Fla. Stat. § 896.101) is modeled on the federal Money Laundering Control Act (18 U.S.C. § 1956), it is reasonable to assume that the courts would reach the same conclusion.
Part I of this comment describes Bitcoin, discussing the cryptocurrency’s origins as well as how it works. Part II analyzes both the state and federal anti–money laundering statutes in light of Florida v. Espinoza and the opinions of the federal courts. Part III discusses the state and federal business services statutes in light of Florida v. Espinoza and federal court decisions, including U.S. v. Ulbricht, which held Bitcoin to be within the plain meaning of “money” and “funds” under the applicable federal money laundering statute.
Finally, Part IV of this paper addresses the public policy implications of how Bitcoin is interpreted under criminal statutes pertaining to money laundering. A brief synopsis will provide information on how other countries and states have considered Bitcoin and the steps that the U.S. Congress has begun to take to address Bitcoin in criminal prosecutions.
Brandon M. Peck,
The Value of Cryptocurrencies: How Bitcoin Fares in the Pockets of Federal and State Courts,
26 U. MIA Bus. L. Rev.
Available at: https://repository.law.miami.edu/umblr/vol26/iss1/9