by Richard W. Millar, Jr.

Aside from being a nice place to stay, the St. Francis Hotel in San Francisco has a unique tradition. For the last eighty years or so—a period which in my mind qualifies as a tradition—the hotel has washed all of its coins. That’s right, there is a guy in a room somewhere in the bowels of the hotel with a machine that daily cleans all the coins so they can be recirculated throughout the hotel and the change given out will be clean.

The tradition started when, in the days of yore, the hotel hosted a weekly fashion show and the women attending wore white gloves which got soiled by dirty coins. (That’s probably not the only thing that soiled them, but I digress.)

With the advent of credit cards, the daily accretion of coins has diminished and women long ago stopped wearing white gloves but, anachronistic or not, the hotel charmingly washes on.

Perhaps more importantly, the St. Francis has never been charged with money laundering.

The crime of money laundering cannot, obviously, be defined literally or else the St. Francis people would be in the hoosegow unless protected by the city’s status as a sanctuary city, which would be a stretch even by San Francisco standards.

So the crime of money laundering is more theoretical than literal. But what if the “money” part was also more theoretical than literal? In other words, can someone be guilty of money laundering if the money is not, well, money?

Like bitcoins.

I have read a lot about bitcoins and probably have understood less than 25% of what I’ve read. My mind opts out when it comes to the distinction between reality and virtual reality. I just can’t wrap my head around the idea that something that does not exist has trading value.

The Feds, however, are all over the idea of bitcoins and other virtual currencies, at least in Miami where a task force was formed with the Secret Service and the Miami Beach Police Department to actually, as opposed to virtually, investigate bitcoin transactions in South Florida. This, in turn, led their attention to one Michell Espinoza who had a Craigslist-like website for trading bitcoins.

An undercover officer met with Mr. Espinosa who allegedly agreed to sell the officer .40322580 Bitcoin for $500. (I was never a math major so I can’t possibly figure out that exchange rate.) Two more transactions took place and a fourth was set up in a hotel room fully wired and camera ready. At that time, Mr. Espinosa was arrested and charged with being something called “a money transmitter” and money laundering.

Without boring you with an enervating discussion of the money laundering and transmitting statutes, suffice it to say none of the definitions covered bitcoins.

“Nothing in our frame of reference allows us to accurately define or describe Bitcoin,” sayeth Eleventh Judicial Circuit Court Judge Teresa Pooler in ruling on a Motion to Dismiss. (If nothing else, the quote heartwarmingly validates my own ignorance, but, again, I digress.)

The court further found that “there is unquestionably no evidence the defendant did anything wrong other than sell his Bitcoin to an investigator who wanted to make a case.”

So, for the nonce, Mr. Espinoza is free to continue his trading business, if that is what it can be called. But if I had some bitcoins that I really wanted to be clean,

I would take them to the St. Francis Hotel.

Richard W. Millar, Jr. is a member of the firm of Millar, Hodges & Bemis in Newport Beach. He can be reached at millar@mhblaw.net.