United States District Court, D. Maine
ORDER ON DEFENDANTS' MOTION TO DISMISS
Z. SINGAL UNITED STATES DISTRICT JUDGE.
the Court is Defendants' Motion to Dismiss Count One of
the Indictment (ECF No. 80). For the following reasons, the
Motion is DENIED.
One, the sole count in the Indictment, alleges that
Defendants Sal Mansy and TV Toyz, LLC, violated 18 U.S.C.
§ 1960 by unlawfully operating an unlicensed money
transmitting business,  in this case, a business dealing in the
virtual currency Bitcoin. Defendants contend that their business
fell outside the purview of Section 1960 because bitcoins are
not “money” or “funds” within the
meaning of the statute. The Court disagrees and adopts the
persuasive analysis of the majority of the district courts
that have recently addressed this question. See United
States v. Murgio, 209 F.Supp.3d 698, 707 (S.D.N.Y.
2016); United States v. Faiella, 39 F.Supp.3d 544,
545-46 (S.D.N.Y. 2014); see also United States v.
Budovsky, No. 13-cr-368 (DLC), 2015 WL 5602853, at *14
(S.D.N.Y. Sept. 23, 2015) (18 U.S.C. § 1960 encompasses
businesses that transmit virtual currency); United States
v. E-Gold, Ltd., 550 F.Supp.2d 82, 88-93 (D.D.C. 2008)
(same); cf. United States v. Ulbricht, 31 F.Supp.3d
540, 570 (S.D.N.Y. 2014) (bitcoins fall within the purview of
the money laundering statute, 18 U.S.C. § 1956).
reliance on a magistrate's recommended decision in
United States v. Petix, 15-CR-227A, 2016 WL 7017919
(W.D.N.Y. Dec. 1, 2016) is misplaced. Not only was this
decision never adopted by the district court, but this Court
is not persuaded by its reasoning, for the reasons well
outlined in the Government's Response. (See ECF
No. 81, Page ID #s 255-62.) Defendants' most developed
argument, that the IRS's treatment of virtual currency as
“property” means that virtual currency cannot be
“money” in other contexts, has been expressly and
persuasively rejected by other courts. See, e.g.,
Murgio, 209 F.Supp.3d at 709; Sec. & Exch.
Comm'n v. Shavers, No. 4:13-CV-416, 2014 WL
12622292, at *6 (E.D. Tex. Aug. 26, 2014). Lastly, the rule
of lenity does not require the Court to accept a strained
reading of Section 1960 where the statute's language,
structure, and purpose all point towards Bitcoin falling
within its scope. See Faiella, 39 F.Supp.3d at 547
(“[T]here is no . . . irreconcilable ambiguity
requiring resort to the rule of lenity.”); see also
Abramski v. United States, 134 S.Ct. 2259, 2272 n.10
(2014) (stating that the rule of lenity does not apply where
a statute's “context, structure, history, and
purpose resolve” any seeming ambiguity).
these reasons, the Indictment does not fail to state a
criminal offense as to Defendants, see Fed. R. Crim.
P. 12(b)(3)(B)(v), and therefore, Defendants' Motion to
Dismiss is DENIED.
 Specifically, the Indictment
Between about March 2014 and June 2015, in the Eastern
District of Michigan, District of Maine and elsewhere
[Defendants] knowingly conducted, controlled, managed,
supervised, directed, and owned all and part of a money
transmitting business affecting interstate commerce, which
failed to comply with the money transmitting business
registration requirements set forth in Title 31, United
States Code, Section 5330, and the regulations prescribed
thereunder, including Title 31, Code of Federal Regulations,
(Indictment (ECF No. 3), Page ID # 3.) Title 18 U.S.C.
§ 1960 provides, “Whoever knowingly conducts,
controls, manages, supervises, directs, or owns all or part
of an unlicensed money transmitting business, shall be fined
in accordance with this title or imprisoned not more than 5
years, or both.” 18 U.S.C. § 1960(a). Relevant to
this matter, “unlicensed money transmitting
business” is defined in part as “a money
transmitting business which affects interstate or foreign
commerce in any manner or degree and . . . fails to comply
with the money transmitting business registration
requirements under section 5330 of title 31, United States
Code, or regulations prescribed under such section.”
Id. § 1960(b)(1)(B). “‘[M]oney
transmitting' includes transferring funds on behalf of
the public by any and all means including but not limited to
transfers within this country or to locations abroad by wire,
check, draft, facsimile, or courier . . . .”
Id. § 1960(b)(2). The statute does not
otherwise define “money” or
 For a primer on Bitcoin, see Jerry
Brito and Andrea Castillo, Bitcoin: A Primer for
Policymakers, Mercatus Center, George Mason University
(2013), available at