The IRS recently ruled that Bitcoin is property, not a "monetary instrument." And now the attorney for alleged Silk Road founder Ross Ulbricht is arguing that his client must be innocent of money laundering because Bitcoin officially isn't money, reports Wired.
Silk Road was the anonymous marketplace for drugs and weaponry favored by the internet's Bitcoin black market.
Attorney Joshua Dratel wrote a memo calling for a dismissal of some charges against Ulbricht, stating that "both IRS and FinCEN have categorically declared that Bitcoins are not 'funds.' Thus, an essential element of §1956 — a 'financial transaction' — is absent because a necessary component thereof — either 'funds' or 'monetary instruments' — is lacking. Consequently, it is respectfully submitted that Count Four must be dismissed."
Ulbricht was indicted in both New York and Maryland, and these potential dismissals would only slightly alleviate Ulbricht's legal situation as they only apply in New York.
Even if they were dropped, there's still one narcotics conspiracy charge, one count of running a criminal enterprise, and one count of conspiracy to commit computer hacking. Dratel is moving for these to be dismissed as well, citing them as "unconstitutionally vague."
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