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Laundering is usually "the concealment of the origins of illegally obtained money." That could apply to swapping for euros or whatever. It's whether you are doing it to conceal the origins that is important.

Yeah, I think they messed this up. In my view they could have charged him with money laundering if they could have proven that the bitcoins he was using were purchased with illicitly obtained funds. The laundering would have taken place when the bitcoins were purchased, not when they were sold.

I'm not sure exactly what you're implying. Are you suggesting Espinoza was laundering? Or currency exchange is money laundering?

That his buddy had to cop to a plea deal with overzealous prosecutors is unfortunate, but in no way changes Espinoza's case.