On April 8, West Virginia passed a new bill (pending the Governor’s signature) that defines cryptocurrency in the context of money laundering.

In the bill, “Cryptocurrency” would mean “digital currency in which encryption techniques are used to regulate the generation of units of currency and verify the transfer of funds, and which operate independently of a central bank.” The term “monetary instruments” would encompass cryptocurrency.

The law would make it unlawful to “conduct or attempt to conduct a financial transaction [broadly defined to involve the use of cryptocurrency] involving the proceeds of criminal activity knowing that the property involved in the financial transaction represents the proceeds of, or is derived directly or indirectly from the proceeds of, criminal activity.”

By way of penalty, violation of the law, if enacted, would be either a misdemeanor or a felony depending on the severity of the crime. Interestingly, the pending law would allow for forfeiture or disgorgement of cryptocurrency. It is not yet clear how authorities in West Virginia would force alleged criminals to give up access to certain cryptocurrencies (by giving up their private keys) without also forcing them to waive their Fifth Amendment right against self-incrimination.

View the full bill here