Ride the Lightning
Cybersecurity and Future of Law Practice Blog
by Sharon D. Nelson Esq., President of Sensei Enterprises, Inc.
Court Rules that SEC Has Authority to Regulate Bitcoin Investments
August 22, 2013
The digital world makes for some novel law. Trendon Shavers, accused by the SEC of running a $4.5 million Bitcoin Ponzi scheme, had argued that the Bitcoin virtual currency is not money and that Bitcoins don't fall within the definition of securities.
However, Judge Amos L. Mazzant of the Eastern District of Texas ruled against him on both fronts last week.Bitcoins, which are created by open-source software and can be purchased with online real money through exchanges, are used as money to purchase goods and services and can be bought in transactions that "meet the definition of investment contract, and as such, are securities."
Let the lawsuit proceed.