In December 2019, a federal grand jury in the District of Columbia indicted Larry Dean Harmon for conspiracy to launder monetary instruments, in violation of the District of Columbia’s Money Transmitters Act (MTA). He was charged in connection with his alleged operation of Helix, an underground tumbler for bitcoin. As described in the indictment, Helix “enabled customers, for a fee, to send bitcoins to designated recipients in a manner which was designed to conceal and obfuscate the source or owner of the bitcoins.” This service, which was located on the Darknet, was allegedly “advertised . . . as a way to” mask drug, gun, or other illegal “transactions from law enforcement.”
Harman moved to dismiss the case, claiming failure to “state an offense.” In deciding that motion, it was necessary for Chief Judge Beryl A. Howell to decide whether Bitcoin is “money” for purposes of the MTA.
The MTA never defines “money.” Harmon argued for importing the District’s adoption of the Uniform Commercial Code’s (UCC) definition of money: “a medium of exchange currently authorized or adopted by a domestic or foreign government.” Under that definition, Bitcoin would not qualify as money. The court rejected the argument that “money” should be given a specialized meaning. It noted that other provisions of the statute gave specialized meaning to 15 other term, but not “money,” implying that “money” should be given its ordinary meaning.
The court explained that the term “money” commonly means a medium of exchange, method of payment, or store of value. The court held that “Bitcoin is these things.” This holding, of course, was made in the specific context of the definition under the MTA, which is a statute of the District of Columbia, not federal law.
Harmon also challenged the count against Helix, for fail[ing] to comply with the money transmitting business registration requirements under federal law. Harmon argued that there was failure to state an offense because an “unlicensed money transmitting business” under 18 U.S.C. § 1960(b)(1)(B) must transmit funds from one person or location to another person or location but “the Indictment fails to allege that Helix did anything other than provide bitcoin back to the user from whom it was sent.” The court disagreed. Helix’s business, according to the court, 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 qualified as money transmission.
For these reasons, in the opinion dated July 24, 2020, the court denied the motion to dismiss the indictment.
