Bitcoin is money, U.S.
judge says in case tied to JPMorgan hack
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[September 20, 2016]
By Jonathan Stempel
NEW YORK (Reuters) - Bitcoin qualifies
as money, a federal judge ruled on Monday, in a decision linked to a
criminal case over hacking attacks against JPMorgan Chase & Co and
other companies.
U.S. District Judge Alison Nathan in Manhattan rejected a bid by
Anthony Murgio to dismiss two charges related to his alleged
operation of Coin.mx, which prosecutors have called an unlicensed
bitcoin exchange.
Murgio had argued that bitcoin did not qualify as "funds" under the
federal law prohibiting the operation of unlicensed money
transmitting businesses.
But the judge, like her colleague Jed Rakoff in an unrelated 2014
case, said the virtual currency met that definition.
"Bitcoins are funds within the plain meaning of that term," Nathan
wrote. "Bitcoins can be accepted as a payment for goods and services
or bought directly from an exchange with a bank account. They
therefore function as pecuniary resources and are used as a medium
of exchange and a means of payment."
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The decision did not address six other criminal counts that Murgio
faces, Nathan wrote.
Brian Klein, a lawyer for Murgio, said he disagreed with the
decision.
"Anthony Murgio maintains his innocence and looks forward to
clearing his name at his upcoming trial," he added.
Prosecutors last year charged Murgio over the operation of Coin.mx,
and in April charged his father Michael with participating in
bribery aimed at supporting it.
Authorities have said Coin.mx was owned by Gery Shalon, an Israeli
man who, along with two others, was charged with running a sprawling
computer hacking and fraud scheme targeting a dozen companies,
including JPMorgan, and exposing personal data of more than 100
million people.
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A sticker reading "Bitcoin accepted here" is displayed at the
entrance of the Stadthaus town hall in Zug, Switzerland, August 30,
2016. REUTERS/Arnd Wiegmann
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That alleged scheme generated hundreds of millions of dollars of profit through
pumping up stock prices, online casinos, money laundering and other illegal
activity, prosecutors have said.
Shalon has pleaded not guilty, and is being held at the Metropolitan
Correctional Center in Manhattan. He hired new lawyers last month and is seeking
permission to replace lawyers who joined the case in June, a Monday court filing
showed.
The case is U.S. v Murgio et al, U.S. District Court, Southern District of New
York, No. 15-cr-00769.
(Reporting by Jonathan Stempel in New York; Editing by David Gregorio and Diane
Craft)
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