Lawyers Want Bitcoin Money Laundering Charges Dropped on Technicality

Lawyers representing two Florida men charged with bitcoin-related money laundering want to have the charges dropped on a technicality.

AccessTimeIconApr 10, 2014 at 1:12 p.m. UTC
Updated Sep 11, 2021 at 10:38 a.m. UTC

Lawyers representing two Florida men charged with bitcoin-related money laundering want to have the charges dropped on a curious technicality.

Adber Espinoza and Pascal Reid were arrested in February following an undercover sting operation. Police made the arrests after undercover officers took to LocalBitcoins.com posing as credit card fraudsters.

Officers were looking for someone to launder their cash and buy bitcoins to fund illegal activities, namely to buy stolen credit card data. Having allegedly agreed, Reid and Espinoza both stand accused of laundering money and running an unregistered money service.

Can’t launder without money

The Internal Revenue Service recently issued new guidance which classified bitcoin as 'property' rather than currency. However, even before the IRS statement bitcoin was not considered 'money', at least not in the eyes of the law.

Lawyers representing Reid and Espinoza are planning to use this technicality to their advantage. The suspects have pleaded not guilty and their defence is now looking to have the charges dropped, since bitcoins are not defined as 'money', they argue money laundering legislation should not apply to them.

However, Miami-Dade County prosecutors disagree. They insist money laundering charges can stick and believe they fit the alleged crime, Fox News reports.

Legal precedent?

According to the IRS bitcoin guidance, issued on 25th March, digital currencies will be treated as property. However, this guidance only applies to federal taxes – general rules for property transactions still apply for bitcoin and other digital currencies.

Miami-Dade State Attorney Katherine Fernandez Rundle says this is the first time any state decided to bring money laundering charges in a case involving bitcoin.

Earlier this month a similar case was made by Joshua Dratel, Ross Ulbricht’s defence lawyer. Ulbricht is, of course, facing serious charges stemming from his association with online drugs bazaar Silk Road.

Dratel argues that at least one count of money laundering against Ulbricht should be dismissed, citing FinCEN and IRS guidance as proof of his argument. However, the case against Ulbricht to that involving Reid and Espinoza – as they allegedly accepted cash for their services, while Ulbricht stands accused of dealing solely in bitcoin.

DISCLOSURE

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.

Trending

1
CoinDesk - Unknown
Massachusetts Warns of Crypto Scams Targeting LGBTQIA+ Community

Scammers may be taking advantage of June being Pride Month to target this community.

CoinDesk - Unknown
2
CoinDesk - Unknown
Final Toncoin Mined Ahead of Transition to Proof-of-Stake

From now on, new toncoins will only enter circulation by PoS validation, resulting in a decrease of new TON entering the network by about 75% to 200,000 daily.

CoinDesk - Unknown
3
CoinDesk - Unknown
First Mover Asia: Chip Maker Nvidia Isn’t an Ether Proxy, Bitcoin Holds Near $21K

Crypto mining aided Nvidia's bottom line, but it hasn't been a major cause of the stock's steep decline. Ether falls but hovers around $1,200.

CoinDesk - Unknown
4
CoinDesk - Unknown
CoinFLEX to Launch a $47M Recovery Token to Solve Withdrawal Issues

CoinFLEX said last week it was halting withdrawals amid market declines and counterparty uncertainty.

CoinDesk - Unknown