Just look at money laundry laws, many of them apply to Bitcoin unmodified. Any exchange or barter of valuable assets (gold, diamonds, currency, real estate, casino chips etc.) is money laundry if done with the purpose of misrepresenting the source or destination of wealth.
Since Bitcoin transfers shield the sender and the receiver from each other, they fit
by default the broad definition of money laundry. It's easy to target any on-line shop or non-shady exchange. They could discourage the wast majority of US based shops from accepting Bitcoins by merely posting a message on the IRS site that accepting such payments without complying to know-your-customer is illegal. Nobody fancies a trip to "pound me in the ass" land for the sake of a few extra customers.
Would that destroy the concept of distributed currency ? I don't think so, but yet again, what good is an electronic currency that can't be used legally online ? It may still be significant for potheads, traffickers and other persons dealing in the black market, but not for most regular people.
The terms "transaction" and "financial transaction" are defined in § 1956(c)(3) and (4). In short, virtually anything that can be done with money is a financial transaction—whether it involves a financial institution, another kind of business, or even private individuals. Thus, the simple transfer of cash from one person to another may constitute a money laundering offense. See United States v. Otis, 127 F.3d 829 (9th Cir. 1997) (drug dealer's delivery of cash to a money launderer is a financial transaction). Other examples abound in the case law. See United States v. Herron, 97 F.3d 234, 237 (8th Cir. 1996) (wire transfer through Western Union is a financial transaction); United States v. Rounsavall, 115 F.3d 561 (8th Cir. 1997) (writing check to purchase cashier's checks is financial transaction); United States v. Brown, 31 F.3d 484, 489 n.4 (7th Cir. 1994) (processing credit card charges involves "payment, transfer, or delivery by, through, or to a financial institution").
Note that the transaction does not need to involve money or other monetary instruments. Simply transferring title to certain kinds of property, such as land or vehicles, falls within the statutory definition of a financial transaction. See United States v. Hall, 434 F.3d 42, 52 (1st Cir. 2006) (recording a mortgage is a financial transaction); United States v. Carrell, 252 F.3d 1193, 1207 n.14 (11th Cir. 2001) (transfer of title to real property is a financial transaction under section 1956(c)(4)); United States v. Westbrook, 119 F.3d 1176 (5th Cir. 1997) (purchase of a vehicle is a financial transaction because it involves transfer of title); 18 U.S.C. § 1956(c)(4)(A)(iii)
UNITED STATES ATTORNEYS' BULLETIN SEPTEMBER 2007
