The case leading to the judgement had its beginning in March 2014 as a Dutchman residing in Estonia, Otto Albert de Voogd, launched web environment www.btc.ee via which he offered the opportunity to acquire or sell the virtual currency Bitcoin. Mr Voogd claimed to mediate the money as his hobby; meanwhile, several signs pointed to intentional business activity – for instance, payments for the service were by cash or transfer.
-A court dispute of principle
And that vas the very thing that inspired a desire in Financial Intelligence Unit at police (FIU) to search it out; thus, both orally and in writing they proceeded to pose several questions to Mr de Voogd. As an example of that, FIU asked to be shown bank account numbers and owners where the money made from mediation of Bitcoins was being sent. As a reply, however, a notice came on April 21st 2014 of Mr de Voogd having sued the unit.
Namely, de Voogd was of the opinion that his activity remained outside Money Laundering (and Terrorist Financing) Prevention Act, and FIU was not competent to exercise supervision over transactions with Bitcoins. Pretty soon, he halted his activities in Estonia and departed; the court saga continued, however, aimed at answering a matter of principle: is the moving of Bitcoins financial activity or not?
Now, yesterday and having passed all three instances of court, it was conclusively and officially determined that as Bitcoin comes with monetary value and thus allows discharging of obligations, trading therewith is economic activity. As also formerly underlined by European Court of Justice: the virtual currency Bitcoin has no other meaning than to be used as a means of payment.
Thus, pursuant to materials of the court case it made no difference whether Mr de Voogd saw his activity as a hobby or something else – this in no way excluded the suspicion by Financial Intelligence Unit that his activity may have met the criteria of a provider of alternative means of payment.
«Buying and selling of Bitcoins as economic activity was pointed to by the expected continuance of the activity of the addressee of the prescript, the alleged existence of an office, payment options both by transfer and cash, as well as the sufficient likelihood of the activity targeted towards a profit,» reads the court judgment.
Supreme Court rejected the claim by de Voogd that his activity could in no way be linked with Estonia as the portal was not located in Estonian servers. «The activity of Mr de Voogd had a sufficient link with Estonia in order to have obligations and restrictions as prescribed by Estonian law extended to him. Irrespective of location of server, Estonia was among the places of activity of appellant and, among other things, the website had been created for Estonian clientele and the transactions could be paid for in cash at an office in Tallinn,» the court found.