A recent Washington D.C. court case saw a man prosecuted on multiple counts for running a Bitcoin (BTC) tumbler — a method of hiding Bitcoin transactions.
The court charged the defendant on three counts back in December 2019, including operating an unlicensed money transmitting business, as a July 24 court document revealed.
The document noted:
“After examination of the relevant statutes, case law, and other sources, the Court concludes that bitcoin is money under the MTA and that Helix, as described in the indictment, was an ‘unlicensed money transmitting business’ under applicable federal law.”
Although this particular instance appears to be a ruling in favor of Bitcoin’s classification as money, current law requires a money transmission when dealing with Bitcoin, even though the coin is not technically under a monetary classification.
The defendant operated a Bitcoin mixing service
Larry Dean Harmon, the defendant in the case, allegedly ran a Bitcoin tumbler business, named Helix, on the dark web. Such mixers muddy the data around Bitcoin transactions, making traceability difficult, the court document detailed.
Harmon saw roughly 354,468 BTC (worth about $3.4 billion at press time) flow through his business from 2014 to 2017, the document included.
Washington D.C. courts accused Harmon of three separate illegal acts: Conspiracy to launder monetary instruments, operating an unlicensed money transmitting business and engaging in money transmission business without a license.
Authorities did not technically classify Bitcoin differently
Harmon lobbied against two of the accusations, positing the claims as false, although dismissal was not granted.
“The motion to dismiss raises two novel questions: Is bitcoin “money” for purposes of the District of Columbia’s MTA?” the document said. “Was Helix, which operated as a bitcoin tumbler, an ‘unlicensed money transmitting business,’” the document added.
The ruling appears in favor of Bitcoin classification as money, although, in reality, the move simply lays out the need for crypto exchanges to hold money transmitter licenses. Many jurisdictions across the U.S. already require such licensing.
