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If person A steals something, say a bicycle, and sells it to me (I have no knowledge that the bicycle was stolen) the law says I must return the bike to its rightful owner without any compensation - except that I can pursue legal action against the person that sold me the bike.

If this is true, why is not a casino forced to return gambling losses (winnings from the casino's perspective) from a person that used embezzled funds to gamble with? (for instance, see this recent article)

Question 1: Is my assumption correct? Question 2: What is the difference between these two scenarios?

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  • Because money does not stink lol.
    – Greendrake
    Commented Feb 10, 2022 at 0:29
  • Money is fungible; bicycles generally aren't.
    – Kyralessa
    Commented Jun 29, 2022 at 19:28

2 Answers 2

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Because casinos don’t accept bicycles

They insist on cash

With normal property, a possessor can never pass on better title than they have. Since the thief never owned the bicycle, you don’t own the bicycle.

Cash (which includes electronic cash) is a negotiable instrument and different rules apply. A holder in good faith of a negotiable instrument owns it. So if a thief stole cash, they don’t own it but when they spend that cash (at a casino or otherwise) the seller does own it. The previous owner can pursue the thief for their loss but not a person who received the cash in good faith (i.e. without knowing it was stolen).

The reason for this distinction in the law is to provide certainty. If you can’t trust the money (and other things like bearer bonds) the system collapses.

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    FWIW, while I agree that different rules apply to cash, and that they have an effect comparable to the holder-in-due course doctrine, I don't think that, for example, a $10 bill is actually within the legal definition of a negotiable instrument even thought it is negotiable and gets similar legal treatment. The legal basis of bearer bonds and the legal basis of the rights one has in currency, are, I think, separate even though parallel because paper currency has its deep legal roots in negotiable instruments like bank issued gold receipts and only received separate treatment legally later on.
    – ohwilleke
    Commented Feb 10, 2022 at 0:07
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    Electronic cash in the U.S. is governed by UCC 4A. Negotiable instruments in the U.S. are governed by UCC 3.
    – ohwilleke
    Commented Feb 10, 2022 at 0:09
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    So roughly, if a thief steals a car and sells it to me for £10,000, I might lose the car without compensation. If a thief steals £10,000 and buys my car for £10,000, I can keep the cash.
    – gnasher729
    Commented Jun 29, 2022 at 16:47
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For money, I particularly think that this is a rather special case. Whether it is stolen or not, once it is spent, it no longer belongs to the owner. Which gives a pretty clear answer to your question.

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    Commented Jun 29, 2022 at 15:00

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