The Florida legislature recently revised its financial laws, stating that Bitcoin can be used for money laundering. Previously this was not the case – because Bitcoin was not regarded as actual money.Here’s an explanation of how the laws have changed and what this means for you.
Understanding Bitcoin and How It Can Get You into Trouble
What is “Bitcoin”? A bitcoin is a form of digital monetary exchange that is accepted as a payment method by many legitimate websites such as Amazon, Overstock.com, Target, Expedia, and Dell. However, bitcoins can be difficult to define partly because their value frequently fluctuates. They have also come under scrutiny for being used in drug trafficking and sex trade transactions on the black market.In 2016, Miami Beach police arrested a man for trading $1,500 in bitcoins for cash. He was told by undercover officers that the bitcoins would be used to purchase stolen credit card numbers. Because the man was profiting from the fluctuating value of the bitcoins, law officers charged him with two counts of money laundering and one count of unauthorized transmission of money.However, when the case went to court, the judge ruled that since bitcoin isn’t technically money, money laundering had not occurred. The case was dropped, but lawmakers pushed for reform.This year, they passed a revision to the Money Laundering Act which will add “virtual currency” to the definitions of “monetary instruments” in the Florida statutes. Bitcoins will now be defined as a “medium of exchange in electronic or digital format that is not a coin or currency of the United States or any other country.”In short, this new revision makes bitcoins subject to the money laundering clause in the state’s financial laws.
Understanding How Money Laundering Works
Money laundering is defined by Florida law as any financial transaction intended to hide, disguise, conceal, or process money through criminal activity. In order for a defendant to be convicted on charges of money laundering, a prosecutor must be able to prove that the defendant knew the transactions were criminal in nature and that the monetary sources were illegitimate. The prosecution must also prove the defendant knew that the proceeds from the transactions were gained with criminal intent.A variety of different transaction types may be used to launder money. These include:
- Investments
- Monetary gifts
- Bank deposits
- Wire transfers
- Transfer between accounts
- Purchases
- Sales of bonds or stocks
- Loans
- Currency exchanges
- Title transfers for property, vehicles, vessels, or aircraft
As mentioned above, under the new law this list will now include “virtual currency” such as bitcoins.
Stealing money is not necessarily money laundering, though it can be prosecuted as another type of crime. What makes it money laundering is when someone converts the stolen money into a monetary gift, wire transfer, loan, or one of the other forms listed above.Two types of defenses are typically used to fight charges of money laundering. A defendant can claim they didn’t know that the transaction was illegitimate, or that it would be used for criminal purposes. Another defense could be that the defendant was entrapped by authorities to commit the crime. However, the defense that bitcoins are not real money can no longer be used under the new legislation.
Money Laundering Penalties
If convicted of money laundering, a person can face steep fines and years of incarceration. All money laundering charges are categorized as felonies under Florida law. The level of punishment depends on the amount of money that was proven to be laundered.For example, if the amount of money was between $300 and $20,000, the punishment is a third-degree felony and the prison sentence is up to five years. If the amount was between $20,000 and $100,000, the sentence is a second-degree felony with up to 15 years in jail. If the amount of money exceeds $100,000, the crime is considered a first-degree felony with up to 30 years in jail.Those convicted of money laundering also face additional fines. First-time offenders may face penalties of up to $250,000, or double the amount of the money laundered, whichever amount is greater. Second-time offenders may face a $500,000 fine or five times the amount of the money laundered. Additionally, those convicted of money laundering may face civil charges of the sum of the transactions or $25,000, whichever is greater.
Since the punishments are steep for those convicted of money laundering, legal counsel is essential. A Florida defense attorney with experience in cases like these can help protect your reputation, but the earlier you get in contact, the more likely you are to experience a positive outcome.About the Author:Attorney David W. Olson is the founder of the Law Offices of David W. Olson in West Palm Beach. He has been practicing criminal law and successfully representing clients throughout the State of Florida for over 30 years. Throughout his legal career, Mr. Olson has been honored numerous times for both his dedication and excellence in criminal law. He proudly holds the Martindale-Hubbell AV Rating, as well as being recognized as a Top 100 Trial Lawyer (2013), in the Nation’s Top One Percent of attorneys (2015), and as a 10 Best Member of the American Institute of Criminal Law Attorneys (2015). He has even received commendations from members of congress and other public officials for the fantastic work that he's done. Mr. Olson graduated from the University of Florida’s Fredric G. Levin College of Law in 1981 and has been a member of the Florida Bar since 1983.
