D.C. Federal Court Held Bitcoin Was Money Under Local Transmission Law

The U.S. District Court for the District of Columbia ruled on July 24, 2020 that bitcoin qualified as “money” under the District’s Money Transmitters Act and that the government had adequately alleged that the Helix bitcoin tumbler was an unlicensed money-transmitting business under federal law.

Chief Judge Beryl A. Howell’s 49-page memorandum opinion denied Larry Dean Harmon’s motion to dismiss Counts Two and Three of his indictment. Those counts charged him with operating an unlicensed money-transmitting business under 18 U.S.C. § 1960 and conducting money transmission without a District of Columbia license. A separate money-laundering-conspiracy count was not part of the dismissal motion.

The procedural posture is essential. The court was deciding whether the indictment stated offenses, not whether prosecutors had proved Harmon guilty. At that stage, its factual allegations were assumed to be true. Harmon remained presumed innocent, and the July 24 decision did not constitute a conviction.

Why bitcoin counted as money

The District’s Money Transmitters Act defined money transmission but did not separately define “money.” Harmon argued that the court should borrow a narrower definition from the District’s version of the Uniform Commercial Code: a medium of exchange authorized or adopted by a government. Bitcoin would not satisfy that sovereign-authorization requirement.

The court rejected that approach. Examining the statute’s text, structure, history and purpose, it concluded that the ordinary meaning governed. Under that usage, money includes a medium of exchange, method of payment or store of value. Bitcoin’s function brought it within that definition for purposes of the District’s money-transmission statute.

That qualification matters. The opinion did not declare bitcoin to be money under every federal or state law. It did not change the asset’s tax treatment, decide whether any bitcoin-related product was a security or commodity, or require every person transferring bitcoin to obtain a license. The holding addressed the District’s statute and the alleged business activity before the court.

Why the alleged Helix activity mattered

The indictment described Helix as a service that accepted bitcoin and returned or sent bitcoin in a way designed to conceal its source or owner. Harmon argued that this did not amount to transmission because Helix could return bitcoin to the same customer rather than transfer it to another person.

The court found the alleged change in person or location sufficient. It reasoned that Helix received bitcoin for delivery to another address or recipient and that moving funds to a different location while obscuring their origin could qualify as money transmission. The opinion therefore allowed the federal unlicensed-business count to proceed as well.

Prosecutors alleged that Helix exchanged approximately 354,468 bitcoin, valued at approximately $311 million when the transactions occurred, between 2014 and 2017. Those figures came from the indictment and describe the government’s allegations, not findings reached after trial. The dollar amount is an aggregate contemporaneous valuation across the alleged transaction period, not the value of 354,468 bitcoin on July 24, 2020.

Institutional significance and limits

The ruling narrowed one route for cryptocurrency businesses to avoid money-transmitter requirements merely by arguing that bitcoin was not money or funds. Its practical focus was functional: what the service received, where it sent value, who controlled the process and whether licensing and registration rules applied.

Contemporaneous Bloomberg Law reporting characterized the likely market impact as limited while emphasizing the parameters established for District of Columbia licensing. Coinburn makes no claim that the opinion caused a same-day bitcoin-price movement; no venue-specific price series or defensible causal evidence is necessary to explain the legal development.

Later context

In an August 4, 2022 bulletin, the District’s Department of Insurance, Securities and Banking cited the Harmon opinion when explaining its position on virtual-currency money transmission. That later administrative use confirms the decision’s regulatory relevance, but it was not knowable on July 24, 2020 and does not expand what the court decided that day.