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Federal Judge Rules Bitcoin Is A ‘Form Of Money’

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A sticker on the window of a local pub indicates the acceptance of Bitcoins for payment on April 11, 2013 in Berlin, Germany. (credit: Sean Gallup/Getty Images)

A sticker on the window of a local pub indicates the acceptance of Bitcoins for payment on April 11, 2013 in Berlin, Germany. (credit: Sean Gallup/Getty Images)

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MCKINNEY, Texas (CBS Houston/AP) — A federal judge rules this past week that Bitcoin is a “form of money.”

U.S. Magistrate Judge Amos Mazzant made the ruling Monday, stating that Trendon Shavers’ Bitcoin Savings and Trust investments “meet the definition of investment contract” and are securities.

“It is clear that Bitcoin can be used as money. It can be used to purchase goods or services, and as Shavers stated, used to pay for individual living expenses,” Mazzant wrote in his opinion.

Despite their being limitations to Bitcoin as to what governments accept it, the virtual currency is real currency.

“[I]t can also be exchanged for conventional currencies, such as the U.S. dollar, Euro, Yen and Yuan. Therefore, Bitcoin is a currency or form of money, and investors wishing to invest in BTCST provided an investment of money,” Mazzant wrote.

Shavers, founder of Bitcoin Savings and Trust, contended that the BTCST investments were not in fact securities and that Bitcoin was not money, but the judge differed.

The Securities and Exchange Commission has accused Shavers of running a Ponzi scheme and defrauding investors of millions. The SEC claims that Shavers obtained more than 700,000 Bitcoin in principal investments from investors, totaling more than $4.5 million. The investors allegedly lost 263,104 Bitcoin collectively in principal. That’s more than $1.8 million based on the daily average price of Bitcoin when investors purchased their investments, or in excess of $23 million based on current Bitcoin exchange rates.

Bitcoins are created, distributed, and authenticated independently of any bank or government. The currency’s cryptography makes it almost immune from counterfeiting, and its relative anonymity holds out the promise of being able to spend money across the Internet without scrutiny.

(TM and © Copyright 2013 CBS Radio Inc. and its relevant subsidiaries. CBS RADIO and EYE Logo TM and Copyright 2013 CBS Broadcasting Inc. Used under license. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)

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