## Facts

- Michell Abner Espinoza sold bitcoin for cash through in-person meetings arranged via LocalBitcoins.com.
- A Miami Beach detective, working with a federal electronic-crimes task force, conducted undercover purchases of bitcoin from Espinoza in late 2013 and early 2014 in amounts of roughly $500 and $1,000, with Espinoza earning small profits.
- Espinoza described his practice as buying bitcoin below market price and selling above market price for profit, acting on his own account.
- The detective later proposed a $30,000 bitcoin purchase, represented involvement in selling stolen credit cards, and presented a roll of cash that was later identified as counterfeit.
- Espinoza expressed suspicion, requested different denominations or a bank deposit, and did not accept the cash before being arrested.
- The State charged Espinoza with (1) unlawfully engaging in a money services business (money transmitter and/or payment-instrument seller) and (2) two counts of money laundering.
- Espinoza moved to dismiss all counts, arguing bitcoin did not fall within the statutory definitions required by the charged offenses.

## Issues

1. Whether selling one’s own bitcoin for cash constitutes operating as an unlicensed “money services business” as a “money transmitter” or “payment-instrument seller” under Florida’s money-transmitter statute.
2. Whether exchanging bitcoin for cash constitutes a “financial transaction” involving “monetary instruments” or criminal “proceeds” sufficient to support money-laundering charges under Florida law.
3. Whether, given statutory text and notice concerns, the charged statutes could be applied to bitcoin sales absent clearer legislative direction.

## Decision

- The circuit court granted the motion to dismiss and dismissed all three counts.
- The court held bitcoin did not qualify as a “payment instrument” (or equivalent statutory “monetary value”) as charged under chapter 560.
- The court held Espinoza’s conduct was not “money transmission” because he sold his own bitcoin as a principal rather than receiving value for the purpose of transmitting it between parties.
- The court dismissed the money-laundering counts, concluding the statutory definitions did not clearly cover bitcoin and that the evidence did not establish involvement with actual criminal proceeds.

## Legal Principles

- Criminal statutes regulating money services businesses apply only when the alleged conduct falls within the statute’s defined terms; courts will not extend coverage beyond the text.
- “Money transmission” requires receiving currency, monetary value, or payment instruments for the purpose of transmitting the same; selling one’s own property for profit is not transmission in that sense.
- Money-laundering offenses require a qualifying “financial transaction” involving statutorily defined “monetary instruments” or proceeds/property tied to unlawful activity; an undercover officer’s representations alone do not establish actual criminal proceeds in the defendant’s transaction.
- Where statutory language is unclear as applied to new technologies, courts apply fair-notice and lenity principles and leave expansion of criminal coverage to the legislature.

## Conclusion

The court dismissed charges for unlicensed money transmission and money laundering because, under the then-existing statutory definitions, Espinoza’s in-person sales of his own bitcoin for cash were not covered as payment-instrument sales or money transmission, and the alleged laundering transactions did not clearly involve statutory monetary instruments or proven criminal proceeds.


Florida v. Espinoza, No. F14-2923 (Fla. Cir. Ct. 11th Jud. Cir. July 22, 2016)