Last week, we blogged about the latest development in Bitcoin news: how a California bankruptcy court will define Bitcoin.That was the subject of a trustee’s clawback suit against Marc Lowe, a former employee of Hashfast Technologies Inc.And as we stated in our last post, this court’s ruling would set a precedent for financial recovery disputes involving Bitcoin.Currently the Bankruptcy Code does not account for cryptocurrencies like bitcoin – which the judge was also quick to point out.In a slew of recent cases, this is yet another example of technology moving faster than the law.On Friday, bankruptcy Judge Dennis Montali, in the Northern District of California, found that the Bitcoin at issue should be classified as “intangible personal property” and not as currency, allowing the trustee to recover the present value of the BTC at $1.3 million.The Bankruptcy Code defines “intangible personal property” as something of value that cannot be touched or held, similar to a copyright or trademark.

Lowe unpersuasively argued that because Hashfast used Bitcoin as a currency medium of exchange, the court should do the same.However, Judge Montali wasn’t swayed, discounting Hashfast’s treatment of Bitcoin as cash, and stating instead that even if Bitcoin was treated as cash, it “doesn’t make [it] dollars.” The judge ultimately agreed with the trustee’s citation of the CFTC’s and IRS’s characterizations of Bitcoin as a property or commodity.buy bitcoin keychainHowever, Judge Montali made it clear that his classification of Bitcoin as intangible personal property is intended to be limited to actions for fraudulent transfers under Bankruptcy Code §550(a).bitcoin taobaoWe’ll be keeping an eye on upcoming cases and whether the rulings agree with Judge Montali’s classification of Bitcoin as property.ethereum outlook 2017

Further reading from BakerHostetler’s Private Wealth Team:/ NationalCrime & Legal Bitcoins lost in Mt.Gox debacle ‘not subject to ownership’ claims: Tokyo court Kyodo The Tokyo District Court on Wednesday dismissed a lawsuit by a man seeking repayment for bitcoins he kept in an account at the bankrupt exchange Mt.dogecoin payGox Co., with the ruling saying the virtual currency is “not subject to ownership” claims.bitcoin is greedLast June, the Kyoto resident had 458 bitcoins worth around ¥31 million in an account with Mt.faucet bitcoin gratisGox, the Tokyo-based exchange that filed for bankruptcy protection from creditors in February after claiming that tens of millions of dollars worth of the virtual currency and client funds disappeared from its computer system.goldman sachs bitcoin future of finance

Its CEO, Mark Karpeles, was arrested by Tokyo police last week for allegedly inflating his personal account by manipulating virtual currency data.At the Tokyo court, the plaintiff challenged the bankruptcy receiver of Mt.Gox without representation by a legal professional.A lawyer closely following the Mt.Gox affair said: “It will be difficult to simply seek to refund (bitcoins) under law.bitcoin vccYou have to consider a lawsuit from a different legal perspective.” Presiding Judge Masumi Kurachi said the Civil Code envisages proprietorship for tangible entities that occupy space and allow for exclusive control over them.kodi bitcoinThe judge said it is evident bitcoins do not possess the properties of tangible entities and acknowledged that they also do not offer exclusive control because transactions between users are structured in such a way that calls for the involvement of a third party.

Gox’s bankruptcy, some Mt.Gox clients have filed civil lawsuits seeking damages, arguing that the exchange was negligent in properly managing the system, in place of demanding a refund of the bitcoins they held in their accounts.Many customers have also joined the bankruptcy proceedings as creditors, hoping for some repayments from what is left of Mt.On Wednesday, investigative sources alleged that Karpeles, a 30-year-old French national, told his lawyer that the accounts under his name in the company’s system were also used for corporate business.Karpeles was arrested on Saturday for allegedly padding his dollar accounts with the exchange by $1 million.He has denied the allegations leveled by Tokyo police..Prosecutors charged that Espinoza violated Florida statutes on money laundering and for operating an unlicensed money transmitting business.But the defense has argued that these laws do not apply to Espinoza's case, because he was not selling currency — he was selling bitcoin."It's

just like you selling your own personal property," Rene Palomino Jr., Espinoza's attorney, said in a court filing."Since bitcoins are 'goods,' Espinoza's alleged conduct is excluded from the definition of the term 'money transmitter' " under both state and federal law.The case highlights a conundrum that has confused digital currency companies and state regulators alike: how to deal with a digital asset that is not a legal tender but can still hold value."Floridais dealing with the same definitional issues that many other states are dealing with, and that is how the terms currency, money, money transmission and even monetary value are defined," said Carol Van Cleef, a partner at Manatt, Phelps & Phillips.The question is being addressed in various ways by the states' governing bodies.North Carolina's legislature on Monday passed a bill to modify the definition of money transmitters to account for virtual currency companies.In New York, the state's financial regulator took the matter into its own hands last year by creating the BitLicense, which implicitly acknowledges that bitcoin is a store of value.Even federal regulators are divided about how to address bitcoin: the Internal Revenue Service regards it as property, whereas the Treasury Department's Financial Crimes Enforcement Network regulates it as a currency."The

state and federal government is highly fragmented and each seem to have their own view on this," said Perianne Boring, the founder and president of the Chamber of Digital Commerce."Atthe Chamber, we recognize bitcoin as a digital asset because depending on the use case it can take on characteristics of all of the above" — from a property or commodity to a currency or securities instrument, Boring added.In 2008, Florida changed its definition of money transmitter to account for companies dealing with virtual currency — but the modification was not wide-ranging enough, according to Van Cleef."Floridaactually did intend to cover digital currencies," she said.But it did not address how money exchanges — which cannot be performed without a license — could account for virtual currencies, she added."Ifyou're giving me the digital currency in exchange for [dollars] in a face-to-face transaction, you're not moving it to another place or you're not moving it to another person," Van Cleef said.The matter has been placed in the hands of Judge Teresa Pooler of the Miami-Dade Circuit of Florida, who is expected to deliver a ruling on the issue Friday."The

status of the law has not caught up with technology," Palomino said."Everybody thought [bitcoin] was going to be a fad, it would just go away.I think it's going to stay."Ina press release after the arrests, authorities acknowledged the novelty of the case."Allof us in law enforcement know that criminals are always seeking new ways to make their activities profitable," said State Attorney Katherine Fernandez Rundle, noting that the U.S.Secret Service had participated in the investigation."BitCoins are just a new tool in the cyber criminal's toolkit."Her office declined to comment further on the case.Beyond Florida, the case could serve as an example for other states, digital currency advocates say."Ifthe judge rules that bitcoin is a currency , it would only apply in that state," Boring said."However, other states could use that decision or ruling as persuasive material in their own legal systems or legislation to guide their own policy making or case decisions."Thecase is likely to be litigated after Pooler's ruling.