Bitcoin Gets First Mention In Supreme Court Ruling on Taxable Compensationbr>
Today marked a landmark event for the cryptocurrency industry – the first mention of bitcoin in a US Supreme Court case. The cryptocurrency nod came in the dissenting opinion of Justice Stephen Breyer in the case Wisconsin Central Ltd v. United States. Strangely enough, the case was not about any type of cryptocurrency regulation, but rather looked at whether employee stock options represent taxable compensation under the Railroad Retirement Tax Act of 1937.
In his dissenting opinion, Justice Breyer questioned what the courts should consider money and spelled out what he considered a “broader understanding of money.” He argued that stock options should be considered a taxable form of compensation and pointed to a possible future where employees are paid in bitcoin or other forms of cryptocurrencies as a reason for the courts to expand their definition of money.
Ultimately, the 5-4 majority ruled that employees should not be taxed for exercising stock options since the action does not constitute “money remuneration.”
However, writing in a dissenting opinion, Justice Stephen Breyer argued for a “broader understanding of money” and said that stock options should be classified as taxable compensation.
Breyer’s opinion, which included a citation to Money: The Unauthorized Biography — From Coinage to Cryptocurrencies, used bitcoin as an example of the changing nature of money and theorized that “perhaps one day employees will be paid in bitcoin or some other cryptocurrency.”
He wrote (citations omitted):
“Moreover, what we view as money has changed over time. Cowrie shells once were such a medium but no longer are; our currency originally included gold coins and bullion, but, after 1934, gold could not be used as a medium of exchange; perhaps one day employees will be paid in Bitcoin or some other type of cryptocurrency. Nothing in the statute suggests the meaning of this provision should be trapped in a monetary time warp, forever limited to those forms of money commonly used in the 1930’s.“
Justices Ruth Bader Ginsburg, Sonia Sotomayor, and Elena Kagan joined Breyer in his dissent.