The legal stance of Bitcoin, in the United States, seemingly varies from court case to court case. The IRS calls Bitcoin a piece of property, for all intents and purposes. State courts, judges, and laws differ tremendously. A clear answer is a rare and infrequent occurrence. When a state’s view on Bitcoin becomes clear, it usually coincides with a court case where Bitcoin is the focus. In a recent money transmitting case, Missouri’s view was clarified.

Acting United States Attorney for the Western District of Missouri, Tom Larson, announced that Jason R. Klein pleaded guilty to operating an illegal currency exchange. Klein, a 37-year-old entrepreneur, operated a Bitcoin exchange company, the Department of Justice said. While we have seen several individuals lose similar court cases, this one stands out as particularly unique.

Klein sold on, according to court documents. The documents explained that Undercover Internal Revenue Service agents discovered Klein through an advertisement to “buy-bitcoins-with-cash.” The ad also listed a location for where a customer could buy “bitcoin with cash.” After the agents looked Klein up on the internet, they discovered that he “represented himself” on LBC as “jrklein.”

They reached out to “jrklein,” out of thousands of LBC users, and arranged a meet. All said and done, the IRS agents met with Klein five times. The IRS agents clarified—with or to Klein—that they wanted to exchange their cash for his Bitcoin. Although other possible transactions existed on LBC, cash for Bitcoin was not uncommon. He made charged a 10 percent commission rate, and although the internet often scoffs at such a commission, IRS agents arrested him without mention of the money.

The Plea Agreement explained:

Each of the transactions above [referring to a chart of the dates the IRS met Klein] occurred through the in-person exchange of United States currency and an electronic transfer of bitcoin to and through Missouri, and elsewhere, through the use of the Internet. Additionally, each of the transactions above included a fee that Klein, or another, charged the UCAs, and the total amount of fees paid to Klein, and another individual, were not less than $2,122.68. At no point during the time period of February 6, 2015 to July 27, 2016 was the defendant a licensed money transmitter with the State of Missouri or with the Financial Crimes Enforcement Network, as required by federal and State of Missouri law.”

Klein faces five years in federal prison for operating an illegal money exchange—a money exchange that traded USD for property, according to the IRS’s BTC tax document.

The document is titled “IRS Virtual Currency Guidance” (without the subtitle) and answers questions about Bitcoin. “The Internal Revenue Service (IRS) is aware that “virtual currency” may be used to pay for goods or services, or held for investment,” the document explained. After the explanation section, they continued. “Under currently applicable law, virtual currency is not treated as currency that could generate foreign currency gain or loss for U.S. federal tax purposes.”

Inside the document, an email address was provided for any questions that readers had even after reading the document. “The Treasury Department and the IRS recognize that there may be other questions […] not addressed in this notice that warrant consideration.” The email address provided: [email protected]. “Taxpayers should include ‘Notice 2014-21’ in the subject line.”