Bitcoin has proven to be a difficult thing to categorize for both regulators and the courts. Is it money, property or currency? There can be vastly different implications depending on the how these questions are answered, including what laws apply to a Bitcoin transaction or whether the transaction is taxable.
Fox News recently reported on a case in Miami-Dade County where Judge Teresa Mary Pooler didn’t consider bitcoins equal to money. The ruling indicated that because virtual currency was treated as property for federal tax purposes, it didn’t fit the definition of a “payment instrument,” and the specified charges didn’t apply. However, in a 2015 case, a DEA agent who allegedly extorted bitcoins from an individual he was investigating received a sentence of six years for multiple charges that included money laundering. Further, there are regulations in New York requiring companies that hold bitcoins on behalf of customers to follow similar rules required of banks. This suggests New York treats bitcoins more like money than property.
The question of Bitcoin’s category continues to be treated differently depending on jurisdictions. The answer will continuously evolve as more people become aware of bitcoins and their intricacies.