Bitcoins (BTC) may be virtual currencies in nature, but a federal judge of the Eastern District of Texas made a ruling by first establishing if the use of BTC is in the same framework as that of a real currency.
Judge Amos Mazzant found the defendant, Trendon Shavers of Bitcoin Savings & Trust guilty of defrauding customers for $4.5 million worth of BTC investments placed in Shavers’ online hedge fund operation. The lawsuit was filed by the Securities and Exchange Commission against Shavers, who shutdown his online investment facility after mulcting as much as 700,000 in BTCs from online investors.
The judge arrived at a conclusion that BTCs are real money, since consumers can use these to purchase goods and services, including ordinary day-to-day expenses. Judge Mazzant also cited the fact that the virtual coins are also convertible into regular currencies like dollars, Euros, yens or yuans. The only distinction that separates the virtual money from the real currency is that not all facilities accept BTCs as medium of payment.
In fact, one of the most popular uses of the BTC is for placing wagers in Internet-based gambling facilities; but not all online gaming operators recognize bitcoins as acceptable funds for a gaming account due to the volatility of their worth in terms of real money.
However, many are known to mine or amass BTCs for investment purposes, by taking advantage of such volatility. As soon as the selling price of BTCs go up, savvy BTC holders make a killing by selling their virtual money in BTC exchange sites at real dollar values, often higher than the amount by which these were actually acquired.