A US district judge has denied a motion by the one of the founders of early digital currency firm Liberty Reserve to dismiss a federal indictment filed two years ago.

According to court documents, Arthur Budovsky asked the judge to waive the indictment on multiple grounds in June, raising questions about whether the firm, based in Costa Rica, was required to register as a money services businesses and whether bitcoin qualifies as “funds”.

US District Judge Denise Cote of the Southern District of New York rejected Budovsky’s motion, which will set the stage for Budovsky to head to trial.

Budovsky was arrested in May 2013 and charged with conspiracy to commit money laundering, conspiracy to operate an unlicensed money transmission business and the operation of an unlicensed money transmission business.

Liberty Reserve was a payment network that allowed users to exchange a digital currency called LR. The federal government has said that Liberty Reserve enabled billions of dollars in funds to be transferred worldwide without mandated controls or identification protocols.

The company has since featured prominently in discussions regarding bitcoin regarding, especially by law enforcement officials.

Other former employees of Liberty Reserve, including one of its co-founders and its IT manager, have plead guilty to similar charges.

The full court order can be found below:

Budovsky Court Order

Court room image via Shutterstock

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