Does the California Money Laundering Statute (Penal Code section 186.10) Apply to Bitcoin & Cryptocurrencies?

The California Money Laundering statute, Penal Code § 186.10, prohibits engaging in financial transactions that facilitate criminal activity. However, it does not explicitly mention Bitcoin or cryptocurrencies. The statute defines money laundering through the use of a "monetary instrument," yet Penal Code Section 186.9 specifically excludes cryptocurrencies from this definition. Despite the 2023 amendment, the failure to include cryptocurrencies appears deliberate.

Is Bitcoin or Cryptocurrency a Monetary Instrument?

The statute does not define the method of money movement, but it broadly considers any means of transferring money as a "monetary instrument." However, Bitcoin and cryptocurrencies are not included in the definition of "monetary instrument," as stated in Penal Code Section 186.9. The statute's deliberate exclusion of cryptocurrencies suggests they are not classified as "negotiable instruments."

Is a Bitcoin or Crypto Transaction Done Through a "Financial Institution"?

Penal Code Section 186.10 specifies that money laundering must involve "financial institutions." Cryptocurrency exchanges do not operate through traditional financial institutions, raising concerns about money laundering due to their ability to bypass these institutions.

While these issues are just starting to be discussed at the state level, federal money laundering laws are further along in addressing them.

Criminal Defense Specialist

Daniel Horowitz, a Top 100 rated trial lawyer with extensive experience, has handled cases nationwide and internationally.  He is expert in money laundering cases.