In another installment of the continuing saga surrounding the shuttering of the Silk Road online marketplace and arrest of its alleged creator and operator, Ross William Ulbricht, a Southern District of New York judge denied Ulbricht’s motion to dismiss the four-count indictment against him.
The court rejected Ulbricht’s argument that if Bitcoin fell outside the IRS and FinCEN’s traditional definition of “currency,” it likewise had to fall outside the definitions of “funds” and “monetary instruments” as contemplated by the money laundering statute.
The court also found that one could launder money using Bitcoin because, like “funds,” Bitcoin constitutes “something of value” that “can be used to pay for things.”
That said, the court took no issue with the use of Bitcoin as a general matter and clarified that it was the use of Bitcoins as a medium of exchange in financial transactions relating to narcotics trafficking and computer hacking that would render the transactions alleged in this case illegal.
Read the full Update on this topic written by the Decentralized Virtual Currencies group at Perkins Coie.