United States v. Faiella, 39 F. Supp. 3d 544

Defendants operated an underground Silk Road market for Biteoin as a payment instrument.
Faiella is charged with one count of unlicensed money transmitting and one count of conspiracy to commit money laundering.
Faiella moved to dismiss Count One on money/definitions, transmission, and transmitter grounds.
Court held Biteoin qualifies as money/funds under Section 1960 and Silk Road transmissions qualify as transmitting.
FinCEN guidance supports that virtual currency exchangers are money transmitters; exemptions do not apply when only money transmission is provided.
Court addressed potential due process concerns (lenity/ex post facto) and found no ambiguity warranting lenity relief.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Biteoin qualifies as money or funds under §1960	Biteoin is money/funds under plain meaning	Faiella disputes the applicability of money/funds definitions	Biteoin qualifies as money/funds under §1960
Whether Faiella’s Silk Road transfers constitute “transmitting” money	Transfers to Silk Road (via third-party) are money transmission	Silk Road merely bought Bitcoin as a product	Faiella transferred funds to others for a profit, satisfying transmitting
Whether Faiella is a “money transmitter” under §1960	FinCEN guidance treats exchangers as MSBs/money transmitters	Exception for goods/services may apply	Faiella is a money transmitter under FinCEN guidance (exemption not applicable)
Whether application of §1960 to Bitcoin exchanges raises lenity or ex post facto concerns	Statute is straightforward; no ex post facto issue	Novel construction could invoke lenity	No ambiguity requiring lenity; no ex post facto issue found

United States v. Bah, 574 F.3d 106 (2d Cir. 2009) (anti-money laundering statute addressing transfer of drug proceeds)
Moskal v. United States, 498 U.S. 103 (U.S. 1990) (rule of lenity reserved for genuine ambiguity in statute)
Bifulco v. United States, 447 U.S. 381 (U.S. 1980) (lenity due process considerations)