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.

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.

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.