It’s a case that has dragged on for over three years, and one that is highly polarizing. A Florida bitcoin trader is set to stand trial by jury for felony charges after a judge overturned an earlier ruling. The man, Michell Espinoza, had initially fought the case, and successfully so. However, the Third District Court of Appeal recently overturned the earlier ruling.
Espinoza’s case has been highly polarizing, with many being enraged by the police conduct. So, what really happened?
The Entrapment
Espinoza has been a crypto trader for quite some time now. In 2014, the Miami police found him on the peer-to-peer trading platform LocalBitcoins where he traded under the moniker, MichellHack. They contacted him and asked to buy some bitcoins from him. He was more than happy to trade, being the free country that it is. They arranged to meet at a coffee shop.
The police used an undercover cop who posed as the buyer. Espinoza had laid out the terms on the LocalBitcoins website indicating how much cut he makes per trade. For the first trade, he sold the cop bitcoins worth $416 but received $500, making $84 in profit. The second meeting was at an ice-cream shop. He sold bitcoins worth $833 but received $1000, making $167.
There was a third meeting, but this one was a little different than the previous two. As usual, he sold bitcoins and received his profit. However, this time, the police swooped in and arrested him together with his partner. His crime? Felony and money laundering.
According to the police, Espinoza was reportedly informed that the bitcoins would be used to purchase credit card information from Russian hackers. He went ahead and sold the bitcoins anyway, constituting a money laundering offense, or at least aiding in one. As for the felony, the police accused him of conducting a money business without registering with the Florida Office of Financial Regulation.
Why This Could Open up a Pandora’s Box for Crypto
Espinoza’s defense team has dedicatedly fought to clear him of the charges. In 2016, the team succeeded after a Florida judge dropped the charges. The judge, Teresa Mary Poole, stated that Bitcoins don’t amount to money and therefore, Espinoza wasn’t guilty of a felony.
She stated:
The court is not an expert in economics; however, it is very clear, even to someone with limited knowledge in the area, that Bitcoin has a long way to go before it is the equivalent of money
The prosecution wasn’t stopping just yet. It took the case to the Third District Court of Appeal which overruled the earlier ruling. According to the Third DCA, Espinoza should stand trial for felony charges.
While Espinoza awaits the trial date, the crypto community should take a great interest in the case, more so traders from Florida. In ruling that Espinoza should be tried for felony, the judge set a precedent that could bite the industry moving forward. If he is deemed guilty of the felony charges by the jury, it will imply that all the other traders in Florida need to register as money service businesses. This could further strain an industry that’s trying to fight out of a prolonged winter.