A Florida judge is scheduled to decide on July 1 if bitcoin is really money, according to American Banker. The judge is expected to rule whether a man charged with selling bitcoin to undercover police was violating the state’s anti-money launder law, as charged by law enforcement.

The defense argues that bitcoin is personal property, so the man can’t be accused of operating an unlicensed money transmitter business.

Police arrested Michel Espinoza in a Miami Beach motel in 2014 for agreeing to sell $30,000 worth of bitcoin to an undercover police officer he met on LocalBitcoins.com.

Prosecutor Cites State Statute

Prosecutors claimed Espinoza violated Florida’s anti-money laundering law for operating an unlicensed money transmitting business.

The defense claimed the laws don’t apply because Espinoza was selling bitcoin, not money.

Charles Evans, an economics professor at Barry University, acting as a defense witness, told the court in January no central government or bank backs bitcoin, regulation of the cryptocurrency varies by jurisdiction, and the IRS considers bitcoin trades the same as bartering, CCN.com reported.

Evans called bitcoin “poker chips that people are willing to buy from you.”

Tom Haggerty, the prosecutor, argued that the cryptocurrency is the same as cash, noting that some restaurants accept it as payment. “You don’t purchase a hamburger with a comic book,” Haggerty said. “You usually purchase it with cash, or in this case, a bitcoin.”

Judge Asks For More Time

Miami-Dade Circuit Judge Teresa Mary Pooler asked for more time to research the matter before making a decision.

Pooler said the topic is “the most fascinating thing I’ve heard in this courtroom in a long time.”

The case is believed to be the first money-laundering charge against someone accused of dealing in bitcoins.

Rene Palomino Jr., Espinoza’s attorney, compared selling bitcoin to selling one’s personal property. She said Espinoza’s alleged conduct is excluded from the definition of the term “money transmitter” under both federal and state law.

The case underscores the conflict that state lawmakers face in addressing digital assets that hold value but are not legal tender.

Carol Van Cleef, a partner at Manatt, Phelps & Phillips, said states are dealing with the issue of how the terms “money transmission,” “monetary value,” “currency” and “money” are defined.

North Carolina’s legislature passed a bill Monday to change the definition of money transmitters to account for virtual currency companies.

New York’s BitLicense implicitly acknowledges that bitcoin is a store of value.

Federal regulators are divided on how to address bitcoin. The IRS considers it property, while the Financial Crimes Enforcement Network considers it currency.

Also read: Economist argues BTC isn’t real money in money laundering case

Issue Perplexes Government

Perianne Boring, the president and founder of the Chamber of Digital Commerce, said governments are highly fragmented in their views on the matter.

The chamber recognizes bitcoin as a digital asset since it can take on characteristics of property, currency, commodity and securities instrument, Boring said.

Judge Pooler is expected to deliver a ruling on the issue Friday.

Palomino said the law has not caught up with technology. People thought bitcoin was going to be a fad, but she thinks they were wrong.

In a press release after the arrests, Florida authorities acknowledged the case’s novelty.

State Attorney Katherine Fernandez Rundle said law enforcement knows criminals look for new ways to make their activities profitable, and bitcoins are a new tool in the cyber criminal’s toolkit.

Other States are Watching

The case could serve as an example for other states, according to digital currency advocates.

Boring said if the judge rules that bitcoin is a currency, it would only apply in that state. But other states could use the decision to guide their own policy making or case decisions.

Both parties said they will go to trial if they lose.