Reuters reports that U.S. District Judge Jed Rakoff rejected a plea by Robert Faiella, facing charges of money laundering and operating a an unlicensed money transmission business along with Charlie Shrem, that Bitcoin should not be considered money. Faiella therefore reportedly contended that the charges of operating an unlicensed money transmission business should be dropped.

The indication is that he only asked for one of the two charges to be dropped, although one wonders why the same argument can’t be made for money laundering.

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Judge Rakoff rejected Faiella’s claim, saying that bitcoin “clearly qualifies as ‘money’ or ‘funds'” under dictionary definitions, a view backed by historical interpretation of the law. He wrote:

“Bitcoin can be easily purchased in exchange for ordinary currency, acts as a denominator of value, and is used to conduct financial transactions.”

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Faiella also claimed that his activities on Silk Road did not constitute “transmission”. Rakoff rejected this argument as well, arguing that he had customer funds sent to the website and transferred to others for a profit.

The legal definition of Bitcoin as money depends on the practical application, a point that as stirred debate. FinCEN now requires businesses even transmitting solely virtual currencies to obtain a money transfer license. On the other hand, the IRS ruled that for tax purposes, Bitcoin is not money.

The latter ruling was indeed evoked by Joshua Dratel, lawyer for Silk Road operator Ross William Ulbricht. In a 64-page motion, he in fact placed the most emphasis on the non-applicability of money laundering laws to virtual currency. His arguments were also rejected.

Faiella and accused co-conspirator Charlie Shrem will face trial on September 22.