Judge rules bitcoin is real money

View previous topic View next topic Go down

Judge rules bitcoin is real money

Post by Anon135246 on Sun Aug 11, 2013 3:30 am

Trendon Shavers is accused of being the Bernie Madoff of Bitcoin. The SEC is going after him for allegedly running a Bitcoin Ponzi scheme from 2011 to 2012. Through his Texas-based “Bitcoin Savings & Trust,” he, under the name “pirateat40,” took in 700,000 Bitcoin — worth $4.5 million at the time — from investors to whom he promised an up to 7% return. In fact, he was paying out Bitcoin from later investors to the earlier investors, taking a hefty cut for himself, and the scheme all eventually fell apart.

Shavers “misappropriated” over 150,000 Bitcoin, according to the SEC, but made poor Bitcoin-for-dollar day trades and wound up only making about $150,000 off of them. He used that money for “rent, car-related expenses, utilities, retail purchases, casinos, and meals,” according to the SEC. His 66 investors from across the country lost a total of 263,104 Bitcoin, worth almost $3 million at the time Bitcoin Savings & Trust (BTCST) went belly up, and worth $26 million today. Protip: Don’t invest your money with a self-termed “pirate.”
21 Things I Learned About Bitcoin From Living On It For A Week Kashmir Hill Kashmir Hill Forbes Staff

In defending himself against the SEC suit, Shavers argued that Bitcoin isn’t actually money and that the SEC shouldn’t be able to prosecute him. “Shavers argues that the BTCST investments are not securities because Bitcoin is not money, and is not part of anything regulated by the United States,” writes Magistrate Judge Amos Mazzant of the Eastern District of Texas. “Shavers also contends that his transactions were all Bitcoin transactions and that no money ever exchanged hands.”

So Shavers essentially tried to say that Bitcoin is a bauble and that he was taking in digital points and giving out digital points that had no real world value. The prosecutors at the SEC disagree, arguing that Bitcoins “are both investment contracts and notes, and, thus, are securities.” (That bodes well for the Winklevoss twins who are currently trying to get the SEC to approve their Bitcoin exchange traded fund so that institutional investors can get their hands in the digital currency.)

Like Tinkerbell the blue fairy turning Pinocchio into a real boy, the judge sided with the SEC, giving Bitcoin his stamp of approval as real world money.

“It is clear that Bitcoin can be used as money,” writes Judge Mazzant in a ruling on Tuesday. “It can be used to purchase goods or services, and as Shavers stated, used to pay for individual living expenses.”

Yup.

“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,” writes Mazzant. “Therefore, Bitcoin is a currency or form of money, and investors wishing to invest in BTCST provided an investment of money.”

Bad news for Shavers, but good news for Tyler and Cameron Winklevoss and their proposed Bitcoin ETF — which will hopefully be better run than Bitcoin Savings & Trust.

Source: http://www.forbes.com/sites/kashmirhill/2013/08/07/federal-judge-rules-bitcoin-is-real-money/


Last edited by Anon135246 on Sun Aug 11, 2013 3:36 am; edited 1 time in total
avatar
Anon135246
Private E-2 (PV2)
Private E-2 (PV2)

Posts : 25
Join date : 2013-08-10

View user profile

Back to top Go down

Re: Judge rules bitcoin is real money

Post by DiamondCardz on Sun Aug 11, 2013 3:36 am

Great for Bitcoin. This is the first step until people realize that Bitcoin isn't a "massive ponzi" or "scam", but in fact a proper currency that they can use.

P.S: Please write your own articles based on the news article, using excerpts as required.
avatar
DiamondCardz
Owner - Ultra Administrator
Owner - Ultra Administrator

Posts : 98
Join date : 2013-08-10
Age : 20
Location : U.K

View user profile http://www.diaforums.com

Back to top Go down

Re: Judge rules bitcoin is real money

Post by Anon135246 on Sun Aug 11, 2013 3:44 am

In Holland currency like bitcoin is already accepted as real money. Everything online, representing actual currency, is concidered money.
avatar
Anon135246
Private E-2 (PV2)
Private E-2 (PV2)

Posts : 25
Join date : 2013-08-10

View user profile

Back to top Go down

Re: Judge rules bitcoin is real money

Post by DiamondCardz on Sun Aug 11, 2013 3:50 am

Yes, but it probably hasn't been ruled specifically as legal tender.
avatar
DiamondCardz
Owner - Ultra Administrator
Owner - Ultra Administrator

Posts : 98
Join date : 2013-08-10
Age : 20
Location : U.K

View user profile http://www.diaforums.com

Back to top Go down

Re: Judge rules bitcoin is real money

Post by Sponsored content


Sponsored content


Back to top Go down

View previous topic View next topic Back to top

- Similar topics

 
Permissions in this forum:
You cannot reply to topics in this forum