The attorney for alleged Silk Road ringleader Ross Ulbricht is asking a federal judge to throw out most of the charges against his client, arguing that the case contains "fatal flaws" and must be dismissed.

Defense lawyer Joshua Dratel is asking the court to dismiss all four charges in Ulbricht's New York indictment, including a money laundering charge that he says doesn't apply because the currency used for the alleged crime – Bitcoin – does not qualify as a "money instrument" under the law.

The other charges are a narcotics conspiracy charge, one count of running a criminal enterprise, and one count of conspiracy to commit computer hacking. Dratel, in his motion to dismiss (.pdf), is asking those counts to be thrown out on the grounds that the laws are unconstitutionally vague and have been misapplied to the case, since they do not cover Ulbricht's alleged conduct. He further asserts that the term "access without authorization" in the computer hacking charge is "undefined."

If he were to win the motion, Ulbricht would still face serious charges in a separate federal indictment in Maryland.

The most interesting argument in the motion-to-dismiss – filed over the weekend – surrounds the money laundering charge. Dratel argues that the charge doesn't apply because it's lacking the primary ingredient needed for money laundering – a “monetary instrument." Since Bitcoins, the currency with which drugs were bought and sold on Silk Road, does not qualify as "funds" or "monetary instrument," the charge does not hold, Dratel asserts in his motion.

Dratel's Bitcoin argument cleverly turns a recent IRS determination about Bitcoin against prosecutors.

The money laundering statute defines a monetary instrument as "coin or currency of the United States or of any other country, travelers’ checks, personal checks, bank checks,and money orders, or ... investment securities or negotiable instruments, in bearer form or otherwise in such form that title thereto passes upon delivery."

But last week the IRS issued a notice stating that virtual currency “does not have legal tender status in any jurisdiction" and that “virtual currency is treated as property" and "not ... as currency."

"Both IRS and FinCEN have categorically declared that Bitcoins are not 'funds,'" Dratel writes in his memorandum of law supporting the motion to dismiss. "Thus, an essential element of §1956 – a 'financial transaction' – is absent because a necessary component thereof – either 'funds' or 'monetary instruments' – is lacking. Consequently, it is respectfully submitted that Count Four must be dismissed."

Ulbricht, 29, was arrested October 1, following a two year investigation by authorities to unmask the Dread Pirate Roberts – the entity that founded and operated the online drug emporium known as Silk Road and whom authorities say was Ulbricht.

The brazen site, which operated from about January 2011 to October 2013, provided an international platform for drug dealers around the world to market a cornucopia of wares, expanding their empires beyond the corner drug stops and back alleys where they normally operated. Buyers and sellers could access the site only through the Tor anonymizing service and conducted transactions in Bitcoin to further conceal their identity.

Ulbricht was indicted twice – in New York and Maryland. He is accused in the Maryland case of conspiring to have a former administrator of Silk Road murdered in exchange for $80,000. The deal was allegedly negotiated in 2013 between Dread Pirate Roberts, the owner of the web site and an undercover DEA agent. The murder never went down in reality, however, since authorities staged the death and sent Dread Pirate Roberts fake images to convince him it had occurred.

With regard to the New York charges that Ulbricht was involved in a narcotics trafficking conspiracy and operated a criminal enterprise, Dratel told the court that the statutes do not cover the conduct Ulbricht allegedly committed. The narcotics charge accuses him of conspiracy to possess and possess with intent to distribute controlled substances. But Ulbricht, he wrote, was never accused of selling or purchasing drugs, just of operating a site where drugs were sold.

Dratel wrote that "neither statute was intended, or has ever been used, to prosecute the conduct alleged against Mr. Ulbricht – that he operated a web site through which other persons – sellers and purchasers – committed illegal activity."

He likened Ulbricht to a landlord whose property was used for illegal purposes or to an internet service provider.

"[N]o landlord has been prosecuted under the federal controlled substances statutes for renting an apartment to a know drug seller. Nor has any internet service provider been prosecuted because users of the service engage in illegal transactions using the provider’s internet service," he wrote.

Even if the statutes can be found to apply, he said, "they would be unconstitutionally vague as applied to him because they present the twin deficiencies of inadequate notice of what is prohibited as well as the danger, realized herein, of arbitrary and discriminatory enforcement."

Furthermore, even a landlord who is found guilty of creating conditions on his property that nurture illegal activity is only subject to civil forfeiture, not to criminal prosecution, he argued.

In addition to the indictments, authorities have seized about 173,991 Bitcoins — currently worth more than $150 million — that they say belonged to Ulbricht. About 29,655 Bitcoins were recovered from servers that authorities say were used to run the Silk Road website, and another 144,336 Bitcoins were seized from a Bitcoin wallet on Ulbricht’s laptop, which authorities grabbed at the time of his arrest in a San Francisco library.

Ulbricht has filed a civil claim asserting ownership of the Bitcoins found on his computer and contesting their forfeiture.

At the same time, Ulbricht has denied through his attorney that he’s Dread Pirate Roberts. But prosecutors say that evidence recovered from the laptop he was using at the time of his arrest at a San Francisco public library “conclusively confirms that Ulbricht was in fact the individual who created and controlled the Silk Road website."

Ulbricht's lawyer notes in his motion that his client is still not admitting to anything.

"For purposes of these motions, and because challenges to an Indictment on its face do not involve disputing the facts alleged therein, the conduct of the Silk Road and Dread Pirate Roberts will be attributed nominally to Mr. Ulbricht," he writes. "However, of course, that does not in any way constitute an admission by him with respect to any allegation in the Indictment."