Is Bitcoin beginning to broach the boundaries of money in Australia?
Could a recent Australian decision, as well as a similar US decision, provide further support to digital currencies being treated at law as a form of money, despite not being legal tender at this time (outside of Japan)?
In the decision of Commissioner of Police v Bigatton  NSWSC 245, the Australian Federal Police sought orders seizing funds and digital currencies in connection with alleged money laundering by Mr Bigatton. These allegations around in connection with Bitconnect. Bitconnect is a recognised scam in which ponzi style returns were offered to lure in participants.
The Police alleged that Mr Bigatton was committing offences of operating an unregistered managed investment scheme, and also alleged that Mr Bigatton was involved in money laundering of funds in excess of $100,000.
Mr Bigatton operated the "BitConnect Lending Program" which the Court described as "an investment vehicle that allowed investors to profit from BitConnect trading bot and volatility software. Investors received a daily profit based on investment options".
As one of the requirements of a managed investment scheme is that people contribute money or "money's worth", Mr Bigatton alleged that dealing in digital currency was not dealing in "money" within the definition in the Corporations Act. Cavanagh J said:
I should say something about the nature of cryptocurrency. Cryptocurrencies are known as virtual currencies and may be considered a form of electronic money, although I understand that Mr Bigatton would dispute that. A unit of a cryptocurrency, such as a bitcoin, is created from code using an encrypted string of data blocks in the form of numbers known as blockchain. Cryptocurrencies can be bought and sold on exchange platforms and can be used to pay for goods and services from a person or entity that is willing to accept the particular cryptocurrency as payment. ... as an example law firms [are] apparently starting to use cryptocurrencies in some of their transactions.
However, he continued in saying:
There does not appear to be any case as yet which has been determined, or at least the parties have not referred me to any case which offers guidance on the submission made by Mr Bigatton that bitcoin is not money. He has not referred me to any case in support of his submission.
So while this caselaw provides some discussion on the point, the issue did not need to be decided for the Police requests for continued freezing of assets to occur. The decision highlights there is not yet clear guidance on the matter.
A recent US decision in the case of United States of America v Larry Dean Harmon dealt with a similar money/bitcoin argument. The defendant, Mr Harmon, was charged with 3 counts of financial crime, and similar to Mr Bigatton, argued that Bitcoin was not money (albeit using a more precise defintion) and therefore he could not be found guilty of a charge of operating an unlicensed money transmitting business.
Mr Harmon was operating a "tumbler" which enables those using it to obscure their identity in transactions in order to preserve their privacy. Naturally any tool which enables greater privacy will attract a level of usage by those who wish for greater privacy to conceal crimes, which interested the US government.
Judge Howell, in that decision, said:
“money,” as detailed below, commonly means a medium of exchange, method of payment, or store of value. Bitcoin is these things.
She rejected the argument they money must be "a medium of exchange currently authorized or adopted by a domestic or foreign government", which was the definition argued for by the defendant.
the Court concludes that bitcoin is money under the MTA and that Helix, as described in the indictment, was an “unlicensed money transmitting business” under applicable federal law.
This decision goes beyond the Australian caselaw, and may well be cited as persuasive precedent in future decisions, where the question of whether Bitcoin is money arises. For the time being, at law Bitcoin isn't money, but given it is increasingly being accepted for goods and services (including by Piper Alderman), for practical purposes it is being treated more and more like a currency.