14 DAY TRIAL // The alleged Silk Road founder Ross Ulbricht is now arguing that he cannot be charged for money laundering after the IRS has recently ruled that Bitcoin is not a “monetary instrument,” but a property.
According to Wired, the Silk Road ringleader’s attorney is asking the judge to throw out most of the charges and argues that the case contains flaws, which means that it must be dismissed.
Not only is Ulbricht trying to get out of the money laundering accusation, but he’s also trying to have three other charges dropped, including one related to narcotics, one count of running a criminal enterprise and one count of conspiracy to commit computer hacking.
It’s quite interesting, however, how Ulbricht’s lawyer is trying to absolve his client of the money laundering charges. As it was mentioned, the IRS has recently made a formal statement about the nature of Bitcoin and has said that the cryptocurrency is a property, not a monetary instrument.
In order for an individual to be charged with money laundering, the lawyer says that there needs to be money involved. Since Bitcoins aren’t legally “monetary instruments” in the United States, the accusation should be dropped.
“Both IRS and FinCEN have categorically declared that Bitcoins are not ‘funds,’.” Thus, an essential element of §1956 – a ‘financial transaction’ – is absent because a necessary component thereof – either ‘funds’ or ‘monetary instruments’ – is lacking. Consequently, it is respectfully submitted that Count Four must be dismissed,” writes Joshua Dratel, the lawyer, in the memorandum supporting the motion.
Ulbricht was arrested back in October, after two years of investigations, as the authorities tried to find out the identity of Dread Pirate Roberts, the ringleader of the online drug marketplace known as Silk Road.
The site was founded back 2011 and it was shut down in October 2013 along with Ulbricht’s arrest, but it was later revived by other individuals. The marketplace gave drug dealers from around the world a place to sell their merchandise and expand their business beyond the street corners they claimed.
Buyers and sellers took advantage of the anonymous nature of Bitcoin and used the cryptocurrency to perform transactions on the site, in an effort to conceal their identities.
Ulbricht awaits trial in New York and Maryland. He is also accused of conspiracy to murder after he allegedly ordered the assassination of several individuals. He continues to deny that he is Dread Pirate Roberts, but prosecutors have strong evidence against him.