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Bernard von NotHaus (the creator of the Liberty Dollar) was convicted of violating a U.S. federal law that forbids the minting of a currency by anyone in the U.S. besides the federal government. Might it be claimed that bitcoins are also a currency and their users or creators violate that same law?

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Something that shouldn't be left out of any commentary on the topic is the fact that NotHaus specifically advocated for merchants to give liberty dollars as change to unsuspecting customers "at a profit" since they cost less than their face value. Since no one is trying to pass bitcoins off as U.S. dollars, I think it's pretty safe. –  eMansipater Sep 26 '11 at 2:57
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@eMansipater - wow, I never knew that. That indeed sounds a lot like fraud to me. "at a profit" indeed :) –  ripper234 Sep 26 '11 at 6:36
    
I probably heard people complaining about how the U.S. government screwed NotHaus unfairly 20 or 30 times before I found this on my own. It's something Liberty Dollar advocates tend to fail to mention. –  eMansipater Sep 26 '11 at 15:34
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4 Answers

There are many complementary currencies in use around the United States quite openly and without government interference, including BerkShares, Ithaca Dollars and similar hyper-local currencies, various bartering or time swapping systems like LETS or Time Dollars, etc. The case you are referring to revolved around minting coins that could easily be confused with US money and allegedly circulating (and encouraging others to do so) to local businesses while passing them off as US money (by a lie of omission, if nothing else).

It may well be that Bitcoin faces legal challenges in various countries, including the US, but this particular case will have set no precedent in that regard.

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The convictions, currently under appeal, are for

  • making coins resembling and similar to United States coins
  • issuing, passing, selling, and possessing Liberty Dollar coins
  • issuing and passing Liberty Dollar coins intended for use as current money
  • conspiracy against the United States

The essenges of bitcoin is a cryptographically signed message and therefore bears no resemblance to United States coins. The Casascius physical bitcoin and Bitbills are the closest things and nowhere do they come close to a U.S. coin. The Bitcoin medals / silver 1 ounce rounds at My Bitcoin Mint or MJB Monetary Metals are simply silver commodities no different than the thousands of other silver medals and rounds produced.

There are private currencies in use in certain locales. Berkshares in Massachusetts and Potomac currency near D.C. even, for instance. Their issuance has been left unchallenged.

So far, there has been no determination as to what Bitcoin is. Is it a commodity? A foreign exchange currency? A stored value (regulated under the definition of prepaid access?) But there is little association between Bitcoin and a U.S. coin.

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That bitcoins may be "intended for use as current money" would seem to be the resemblance. –  Michael Hardy Oct 18 '11 at 15:50
    
von NotHaus has not yet been sentenced, it's unlikely an appeal is actually under way. –  gbroiles Oct 30 '12 at 0:48
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The court where NotHaus was tried is a District court (trial court). In the US federal system, trial court decisions are persuasive authority only - this means that other courts can read them and discuss them and use them as guidance, but they are not required to follow them the way they would be an opinion from a Circuit Court of the US Supreme Court.

Also, trial courts make two kinds of determinations - regarding issues of law, and issues of fact.

Issues of fact are going to be specific to that particular case and aren't meaningfully precedent for any other circumstance. An example would be "we find that Col. Mustard killed Miss Scarlet in the kitchen with a lead pipe."

Issues of law could be applied to other cases - e.g., "the Court finds that a lead pipe is a deadly weapon."

So, it's possible that the court in the NotHaus case ruled on issues of law in a fashion that could be extended to other cases - but many of the rulings were likely very fact-specific (and thus inapplicable to other cases), and even rulings on legal issues will function as suggestions to other trial courts.

If NotHaus appeals his conviction, the appeal is more likely to result in binding precedent; but even that would only be binding on other courts within that appellate circuit, for the rest of the US it would just be persuasive (not mandatory).

The bare fact that NotHaus was convicted is not, in itself, any sort of legal precedent, though it may be a clue about the US government's feelings about alternative currencies.

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There is no evidence to suggest that law applies to Bitcoin. See also What is the current legal status of Bitcoin?

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