Florida v. Espinoza

On January 30, 2019, the Third District Court of Appeals in Florida in the matter of Florida v. Espinoza held that an individual’s sale of Bitcoin for cash constitute money transmission and the sale of a payment instrument. In this instance, the seller was not licensed to act as a money transmitter or money service business. The implication for cryptocurrency based hedge funds may be significant insomuch that compliance with state money transmission laws may become necessary. As indicated here previously, exceptions to federal-level Money Service Business registration exist for instances where the seller is exchanging virtual currency for its own account. This recent decision in Florida muddies the waters as individual states typically constitute the exchange of bitcoin and other cryptocurrency for currency to fall under state money transmission laws. The question that is not answered in the Appeals Court decision is whether Florida money transfer laws were implicated only because the seller accepted physical currency versus draft or bank transfer.

Trust our over twenty-five years’ experience in creating innovative fund solutions for our clients. Contact the hedge fund formation experts at Wabash Advisors to begin the process of starting your hedge fund today. Our knowledgeable and skilled professionals are happy to answer all of your questions. Call (213) 262-9112 for your free consultation or contact us here.

Leave Comment

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes:

<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>