This is exactly what I was charged with. I even had the same attorney! However in my case I did not plead guilty and after $250,000 in attorney fees and payoffs to the government all charges were dropped.
As I have said many times (after I was arrested and learned all about it):
If you want to
advertise on localbitcoins in the US you should get the stupid free license. If you do not get the license they can claim it is a business, claim you need the license, charge you with 18-1960, seized all your assets for their federal asset forfeiture slush fund, put you in jail, etc.
If you are just a customer on localbitcoins (not running an ad) you
may be safe from all this -
maybe. So far I have never heard of a case where they have arrested someone who contacted an ad
as a customer. But, you never know, that may be their next move. I think they would have a hard time claiming you are running a business if you contact an advertiser as a customer. BUT, remember it is all about the civil asset seizure. If you have assets to be seized they will go after you to fund their operations. NOTE: if you are a customer using localbitcoins always assume that the person running the ad you contact is a federal agent, cooperating witness, or undercover agent for one of many different agencies. In other words be very careful what you say. I never got to see all the evidence against me (all the grand jury testimony was sealed and remains sealed to this day) but I can tell you from the evidence I did get to see that many accounts on localbitcoins are owned and operated by government agents.
Of course I know his attorney very well (he was my attorney) and I consider him one of the "good guys" so I have to assume that the plea deal was in the best interests of the client. In other words either a) there were other details of the case that we don't know or b) the guy just did not have the $250,000 needed to fight the charge.
I did not take my case to trial because it was going to cost me a minimum of another $75,000 to take it to trial. Money drives these things on both sides.
The problem is that this money transmitting thing is borderline or slightly on the side of not being against the law. If bitcoin was called a commodity by the US government and there's nothing in the law that says you are supposed to register when trading it. You would have to register if bitcoin was a currency, but it isn't. According to law it's like trading stocks, and you don't need to register to trade stocks, do you?
The fee is obviously not made to discourage the trader, it's the cost of the operation. He's being forced to pay their wages.
You are totally wrong. You do not know what you are talking about. When looking at 18-1960 there are three points that can be argued:
1) MONEY
2) TRANSMITTAL
3) BUSINESS
1) Is Bitcoin money? Already decided in many cases. All they do is leave the broader question as to what Bitcoin is unanswered and simply say that "for the purposes of this specific prosecution we will consider it money or money-like enough to proceed". Basically you do not have an argument here.
2) Transmittal? Is buying and selling on localbitcoins the transmittal of money. First of all you cannot use the argument that Bitcoin is not money (see #1 above). Also whether it can be considered "transmittal" for the purposes of 18-1960 has already been decided in many cases and the precedence is basically yes, it can be considered transmittal for the purposes of 18-1960.
3) Business. This is not a point of law. According to the FinCEN regulations this is a matter of "fact and circumstance". What exactly does this mean? It means that whether what you are doing is a business or not has to be decided by the decider of "fact and circumstance" and in the US that is the jury. In other words in my case it boiled down to this one point: was what I was doing a business or not. They claimed it was a business, I claimed it was not. After 9 months we agreed to disagree on this and they dropped all the charges. Since we never went to trail the point was never decided.
