On April 17, 2020, in United States v. Costanzo, No. 18-10291, 2020 U.S. App. LEXIS 12287 (9th Cir. April 17, 2020), the Ninth Circuit upheld the conviction of a defendant under the “sting” money laundering provision, 18 U.S.C. § 1956(a)(3)(B), ruling that the defendant’s bitcoin sales to undercover agents had the requisite effect on interstate commerce as the sales used internet-enabled and cellular network-connected devices. According to the court, the government’s evidence that the defendant advertised his bitcoin selling business online, used a digital wallet to transfer bitcoin, and had undercover agents use encrypted messaging apps to facilitate the transactions was sufficient to permit a reasonable jury to determine that the bitcoin transactions at issue affected interstate commerce “in some way or to some degree.”
The defendant in Costanzo was caught in an undercover operation that began with IRS Special Agents investigating the purchase and sale of digital currency to facilitate illegal activity.… Read More