Bitcoin Gets Status of ‘Money’ Under D.C. Financial Services Law

UTC by Bhushan Akolkar · 3 min read
Bitcoin Gets Status of ‘Money’ Under D.C. Financial Services Law
Photo: Depositphotos

In a court case hearing involving the use of Bitcoin for transferring funds for illicit activities of drug trafficking, the District Court of Colombia has considered Bitcoin and cryptocurrencies as “money”.

On Friday, July 24, a Federal Court announced that the world’s largest cryptocurrency Bitcoin gets the status of “money” under the Washington, D.C., Money Transmitters Act. Chief Judge Beryl A. Howell wrote for the U.S. District Court of Colombia that money “commonly means a medium of exchange, method of payment, or store of value. Bitcoin is these things”. The court also added that D.C. Law adopts the meaning even though it doesn’t strictly define “money”.

The decision to grant Bitcoin the “money” status came as the court denied to dismiss all the criminal charges against Larry Dean Harmon. Harmon has been accused of operating an underground Bitcoin trading platform as well as running an unlicensed money transmitting business as per the D.C. law.

This ruling might set new parameters for the District Court of Colombia in regulating cryptocurrencies as part of money transmission. It also provides clarity on how the federal and state authorities treat crypto for anti-money laundering purposes. As per the federal court, Harmon was offering services to show any illegal Bitcoin transactions as clean. The federal court grand jury indicted Harmon last year in 2019.

Arguing that Bitcoin isn’t “money” Harmon sought to dismiss the court’s claims of illegal money transmission. Thus, he said that his platform wasn’t a “money transmitting business” as per the U.S. Code.

D.C. Law Adopts Bitcoin Under the Definition of Money

Peter Van Valkenburgh, director of research at Coin Center, said that the district court’s recent ruling means that Bitcoin holds the “money” status only in context of D.C.’s money-transmission-law. Van Valkenburgh said:

“These cases pop up all the time because nearly every state has its own definition of money transmission” that triggers licensing requirements.

As per the court, Harmo’s services were part of the Darknet. They were specially designed and advertised to hide the drugs, guns, and illegal Bitcoin transactions from law enforcement. The court indictment states that Harmon’s services exchanges around $311 million dollars between 2014 and 2017.

The court has also denied releasing Harmon’s 160 Bitcoins currently seized by the government. Harmon’s court order reads that there’s a high probability that all these funds were part of his alleged drug trafficking conspiracy.

Currently, there’s no common law across the U.S. that treats cryptocurrencies in a particular way. Hence, different states have different laws structure for Bitcoin and crypto. Thus, it will be interesting to see if other states define Bitcoin and crypto as “money”. Also, we expect federal law to have a common definition of pan-America in the future.

Bitcoin News, Cryptocurrency news, News
Bhushan Akolkar

Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.

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