US News

Bitcoins aren’t cash, so Silk Road creator’s clean: lawyer

The accused mastermind of the notorious illegal-drug-peddling website Silk Road shouldn’t be charged with money laundering because the encrypted, virtual currency used for its transactions isn’t real money, his lawyer argued in new legal filings.

In papers seeking to dismiss the feds’ case against Ross Ulbricht, lawyer Joshua Dratel said the IRS recently ruled Bitcoin is property – and not a “monetary instrument” – so the money laundering charges against his client should be tossed.

“Bitcoins, the exclusive means of payment on Silk Road, do not qualify as ‘monetary instruments,’ and therefore cannot serve as the basis for a money laundering violation,” Dratel wrote.

A spokesman for Manhattan US Attorney’s office declined comment.

As the Post reported in December, Dratel argued that 144,336 bitcoins seized by the feds from Ulbricht’s personal computer should be returned to Ulbricht because bitcoins are “not subject to seizure” by federal law. As of Tuesday, the bitcoins – which fluctuate in value – were worth $69.2 million. A judge has to rule on that matter.

The government claims the virtual currency was used to facilitate money laundering in support of a host of crimes, including six failed murder-for-hire plots and the sale of cocaine, heroin and other illicit drugs over the Internet.