United States v. Harmon - 474 F. Supp. 3d 76 (D.D.C. 2020)

Rule:

The MTA never defines money. When a statute does not supply a definition, a court generally gives a statutory term its ordinary meaning. The term money, as detailed below, commonly means a medium of exchange, method of payment, or store of value. Bitcoin is these things. 

Facts:

Defendant, Larry Dean Harmon, is charged with three counts related to his alleged operation of Helix, an underground tumbler for bitcoin, a form of virtual currency. As described in the indictment, Helix enabled customers, for a fee, to send bitcoins to designated recipients in a manner that was designed to conceal and obfuscate the source or owner of the bitcoins. This service, which was located on the Darknet- a collection of hidden websites accessible only to anonymized users-was allegedly advertised as a way to mask drug, gun, or other illegal transactions from law enforcement. Helix was used to exchange approximately 354,468 bitcoins, the equivalent of approximately $311 million in U.S. dollars. A federal grand jury indicted the defendant for conspiracy to launder monetary instruments, Count One, in violation of 18 U.S.C. § 1956(h). Count Two, for operating an unlicensed money transmitting business, in violation of 18 U.S.C. § 1960(a), and Count Three, for engaging, without a license, in the business of money transmission, as defined in D.C. Code § 26-1001(10), in violation of the District of Columbia's Money Transmitters Act (MTA), D.C. Code § 26-1023(c). Defendant now moved to dismiss, for failure to state an offense on both Counts Two and Three. 

Issue:

Should the defendant’s motion to dismiss be denied?

Answer:

Yes.

Conclusion:

The court held that after examination of the relevant statutes, case law, and other sources, the Court concluded that bitcoin qualifies as money under the MTA and that Helix's business, though, was receiving bitcoin to send to another location or person in order to mask the original source of the bitcoin. Under the relevant authorities, that qualifies as money transmission. Also, as described in the indictment, it was an "unlicensed money transmitting business" under applicable federal law. The court then denied the defendant's motion to dismiss his indictment for operating an unlicensed money transmitting business, in violation of 18 U.S.C.S. § 1960(a) and engaging, without a license, in the business of money transmission, as defined in D.C. Code § 26-1001(10), in violation of D.C. Code § 26-1023(c) of the District of Columbia's Money Transmitters Act (MTA).