Bitcoin is now recognized a form of “money” and is covered under the Washington, D.C., Money Transmitters Act. This ruling was made by a federal court on Friday. Helix is accused of partnering with Alphabay Market.
The court refused to dismiss money laundering charges against Larry Dean Harmon, the alleged operator of a darkweb Bitcoin mixing platform, for running an unlicensed money transmitting business under D.C. law.
Harmon, who allegedly advertised his platform as a service for removing all links of Bitcoin to any illegal activity, was indicted by a federal grand jury in july 2019. He tried to dismiss illegal-money-transmission claims, arguing that Bitcoin is not money under the MTA and that his platform was not a “money transmitting business” under the US Code.
Chief Judge Beryl A. Howell of the U.S. District Court for the District of Columbia said “Money commonly means a medium of exchange, method of payment, or store of value,…Bitcoin is these things.” This meaning was adopted by the court even if it is not the official definition of “money.”
The director of research at Coin Center, Peter Van Valkenburgh,says that this ruling means that Bitcoin will be treated as money in the context of D.C.’s money transmission law.
According to Van Valkenburgh, “These cases pop up all the time because nearly every state has its own definition of money transmission”.
The Helix Service was advertised as a way to mask illegal bitcoin transactions from law enforcement. The service was located on the darkweb. The service was used to launder $311 million from 2014 to 2017.
The court denied a motion to release 160 bitcoins seized by the government. With the main reason being a high likelihood that all funds involved in the platform were also involved in alleged drug trafficking conspiracy, making them subject to forfeiture.
Bitcoin Mixers fall under AML laws
Services that launder crypto using bitcoin mixing and laundering also fall under federal money transmission laws.
The case is United States v. Harmon, D.D.C., No. 19-cr-395, 7/24/20.
Source: Bloomberg Law