Despite much hype over the ruling by a Florida court that bitcoin is not money, the likeliest outcome of Monday’s decision will be legislative amendments to Florida’s money transmitter laws, rather than the sweeping impact envisioned by some.
Florida state Judge Teresa Pooler dismissed charges on Monday against a man accused of money laundering and operating an unlicensed money services business. Tellingly, the court held that it was “unwilling to punish a man for selling his property to another, when his actions fall under a statute that is so vaguely written.”
In early 2014, Michell Espinoza was caught in a sting operation while selling bitcoin in multiple face-to-face transactions with an undercover agent who claimed that he would use the bitcoin to purchase stolen credit card numbers. Following the trail of convoluted statutory definitions within Florida’s money transmitter laws, the court ruled that Espinoza was not operating an unlicensed money services business—he was merely selling his property.
A “money services business” under Florida law is defined as any person “who acts as a payment instrument seller, foreign currency exchanger, check casher, or money transmitter.” The prosecutor first charged Espinoza with engaging in money transmission, but later changed it to selling a payment instrument. “Money transmission” involves receiving “currency, monetary value, or payment instruments for the purpose of transmitting the same by any means.” Integral to money transmission is the act of transmitting, which the court reasoned is akin to acting as a middleman. Under the court’s analysis, selling one’s own property “does not meet the definition of ‘transmit.’”
Puzzling, however, is the court’s finding that Espinoza did not engage in the sale of a “payment instrument.” Although Florida’s money transmitter law does not define “money,” many state laws define “money” as a medium of exchange issued by a government, leaving little doubt that Bitcoin is not “money” under state law. Decentralized digital currencies, such as Bitcoin, typically fall within the definition of “monetary value,” which is almost universally defined as “medium of exchange, whether or not redeemable in currency.” Although “monetary value” is listed within Florida’s definition of “payment instrument,”  the court swept past that analysis, focusing instead on determining whether Bitcoin is “money.” Rather than considering that Bitcoin could be monetary value, the judge concluded “‘[v]irtual currency’ is not currently included in the statutory definition of a ‘payment instrument;’ nor does Bitcoin fit into one of the defined categories listed.”
The court also dismissed charges of money laundering, finding that Espinoza lacked the requisite intent to promote the alleged illegal activity. Acknowledging the ambiguity in determining whether an act qualifies as “promoting,” the court found that merely “hearing the illicit manner in which the buyer intends to use what has been purchased” unquestionably falls short of promoting the illegal activity.
Although the publicity surrounding the arrest seemed noteworthy at the time, especially considering the “sting operation” that was jointly conducted by the Miami Police Department and the United States Secret Service, it is unlikely the court’s decision will have a dramatic impact outside of Florida, as many state money transmission laws already capture Bitcoin under the definition of “monetary value.”
 Fla. Stat. § 560.125(22).
 Fla. Stat. § 560.125 (21).
 Fla. Stat. § 560.125 (29) defines “Payment Instrument” to include “a check, draft, warrant, money order, travelers check, electronic instrument, or other instrument, payment of money or monetary value whether or not negotiable.”
 Fla. Stat. § 896.101(3)(c).