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 3, 2021 at 11:35 a.m. UTC

Presented By Icon

Election 2024 coverage presented by

Stand with crypto

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.

  • Bitcoin Mining in the U.S. Will Become 'a Lot More Decentralized': Core Scientific CEO
    13:18
    Bitcoin Mining in the U.S. Will Become 'a Lot More Decentralized': Core Scientific CEO
  • Binance to Discontinue Its Nigerian Naira Services After Government Scrutiny
    05:10
    Binance to Discontinue Its Nigerian Naira Services After Government Scrutiny
  • The first video of the year 2024
    04:07
    The first video of the year 2024
  • The last regression video of the year 3.67.0
    40:07
    The last regression video of the year 3.67.0
  • 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 have been updated.

    CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. CoinDesk has adopted a set of principles aimed at ensuring the integrity, editorial independence and freedom from bias of its publications. CoinDesk is part of the Bullish group, which owns and invests in digital asset businesses and digital assets. CoinDesk employees, including journalists, may receive Bullish group equity-based compensation. Bullish was incubated by technology investor Block.one.


    Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.