United States v. Freeman

• Court: Court of Appeals for the First Circuit
• Decided: July 29, 2025
• Docket: 23-1839
• Status: Published

Opinion

United States Court of Appeals For the First Circuit

No. 23-1839

UNITED STATES,

Appellee,

v.

IAN FREEMAN,

Defendant, Appellant.

APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE

[Hon. Joseph N. Laplante, U.S. District Judge]

Before

Gelpí, Lipez, and Thompson, Circuit Judges.

Richard Guerriero, with whom Oliver Bloom, Lothstein Guerriero, PLLC, Mark L. Sisti, and Sisti Law Offices were on brief, for appellant. David M. Lieberman, Attorney, Appellate Section, Criminal Division, U.S. Department of Justice, with whom Jane E. Young, United States Attorney, Georgina L. MacDonald, Assistant United States Attorney, John J. Kennedy, Assistant United States Attorney, Nicole M. Argentieri, Principal Deputy Assistant Attorney General, Lisa H. Miller, Deputy Assistant Attorney General, were on brief, for appellee.

July 29, 2025 THOMPSON, Circuit Judge. Ian Freeman ("Freeman") is, by

his own description, a radio talk show host and church founder

promoting peace, liberty, individual freedom, and morality.

Freeman began selling bitcoin in 2014 as part of his mission to

promote peace. The government, which launched an investigation

into his bitcoin sales, took a different view of Freeman's conduct

and convinced a jury to convict Freeman on counts of conspiracy to

operate an unlicensed money transmitting business, operation of an

unlicensed money transmitting business, conspiracy to commit money

laundering, money laundering, and tax evasion. Post-verdict, the

district court acquitted Freeman on the substantive money

laundering count based on the insufficiency of the evidence. On

appeal, Freeman argues that the district court should never have

allowed the money-transmitting-business charges to reach trial,

because something called the "major questions doctrine" —— which

governs how we read statutes that convey regulatory authority to

administrative agencies —— requires us to interpret the relevant

statutes as not permitting agency regulation of virtual currencies

like bitcoin. He also claims that the district court should have

acquitted him based on the insufficiency of the evidence on his

tax evasion charge and granted him a new trial on the remaining

money laundering conspiracy count due to prejudicial evidentiary

spillover. Finally, he claims that even if his convictions stand,

the district court's imposition of a 96-month sentence is

- 2 - substantively unreasonable. Having carefully considered all

Freeman's arguments, we affirm.

BACKGROUND

Freeman's trial was an 11-day affair at which more than

thirty witnesses testified. This appeal does not require us to

recount every in-and-out of the evidence presented at trial, but

to better orient the reader, we start with a brief overview of the

events leading to Freeman's arrest. From there, we'll dive into

the merits of each of Freeman's arguments on appeal, filling in

the necessary factual details and announcing our standard of review

as we go.1

Freeman's Bitcoin Business

Courts throughout the country have offered thorough

descriptions of what bitcoin is and how it works. All that a

reader need understand for today's opinion is that bitcoin is a

virtual currency, with no physical coinage or government backing.2

1 Because Freeman raises a sufficiency of the evidence challenge to his tax evasion count, we'll present the facts relevant to that count in the light most favorable to the jury's verdict once we get there. See United States v. Paz-Alvarez, 799 F.3d 12, 18 (1st Cir. 2015). For the overview of Freeman's bitcoin sales that follows, however, we summarize the trial record in a "balanced" fashion, because the manner in which we relate these background facts does not impact our analysis of Freeman's remaining claims of error. See United States v. Burgos-Montes, 786 F.3d 92, 99 (1st Cir. 2015). 2 In everyday speech, the phrase virtual currency would seemingly capture any currency that exists on a computer in a non-physical form (for instance, currency used in video games to

- 3 - Instead bitcoin is stored in a software program referred to as a

"wallet." When bitcoin is moved from one wallet to another, the

transfer is accounted for on a public, cryptographic ledger called

the blockchain. Perkins, supra, at 1, 7. But although the ledger

is public and each wallet uniquely identifiable from other wallets,

bitcoin offers relative anonymity compared to traditional bank

transactions, because there is no information associated with a

wallet that can identify who owns the wallet. (By contrast, a

bank customer must provide personal information to a bank to open

an account and conduct transactions.) And unlike electronic

payments sent through banks, which can sometimes be cancelled or

reversed, there is no way for a sender to claw back bitcoin once

it has been sent.3

buy items in that game). See David W. Perkins, Cong. Rsch. Serv., R45427, Cryptocurrency: The Economics of Money and Selected Policy Issues 1 n.2 (2020) (distinguishing between cryptocurrencies and other "digital representations of value"). For the purposes of today's opinion, unless we note otherwise, we use the phrase virtual currency to refer to cryptocurrencies like bitcoin, which can act as an alternative to traditional government-issued currency (we'll refer to this as "fiat currency") and which use cryptographic protocols (i.e., methods of sending information through codes) to ensure that transactions are accurately recorded. Id. at 1 n.2, 3-4, 7-8. 3 This opinion is not meant to be a comprehensive or authoritative account of bitcoin or cryptocurrencies, or of any advancements made in this arena since this case was appealed. Our recitation of the history, function, and value of bitcoin is drawn from the parties' presentation to the district court and jury below and in their briefs to us.

- 4 - To run his bitcoin business, Freeman acquired bitcoin

from large virtual currency exchanges for relatively small

commissions (0.16% in one example) and then resold it to his

customers while charging higher commissions (upwards of 10% in

many cases). Freeman conducted sales through three platforms.

First, he used bitcoin "kiosks" or "ATMs," physical machines in

which a customer could deposit "fiat currency," scan a QR code

associated with a bitcoin wallet, and receive a corresponding

amount of bitcoin in their wallet. Second, he posted

advertisements and communicated with customers on a website called

localbitcoins.com, which allowed users to buy and sell bitcoin

from each other, much as other websites allow users to buy and

sell goods. Finally, Freeman engaged in direct negotiations with

buyers on the messaging software Telegram.

Freeman had what he called a Know Your Customer procedure

for buyers who were purchasing through localbitcoins.com or

Telegram. He asked prospective customers to send him a photograph

of their driver's license and a photograph of themselves holding

a handwritten note indicating that they intended to purchase

bitcoin. Sometimes, he would also ask for customers' phone numbers

to confirm that they intended to buy bitcoin. These procedures

did not apply to purchases made at Freeman's bitcoin kiosks, which

did not require any form of personal verification, even though

kiosk operators can and do impose various verification

- 5 - requirements.4 Across all three of his platforms, Freeman

instituted another policy —— one which eschewed any inquiries into

why his customers were purchasing bitcoin. But it is questionable,

as we'll explain, that such a no-ask policy truly insulated Freeman

from the knowledge that his services were being used by customers

who were, in fact, scammers and money launderers.

The government sought to show that even when Freeman

implemented his Know Your Customer procedures, he ignored multiple

red flags that would have suggested money laundering or scams.

For instance, Freeman permitted individuals to execute

transactions for hundreds of thousands of dollars within the course

of a week, and worked with individuals seeking to exchange hundreds

of thousands of dollars in cash. He also conducted transactions

in which he accepted payment from one person but delivered bitcoin

to another —— something the government calls a "third-party trade."

In consummating these third-party transactions, Freeman sent

individuals, whom the evidence strongly suggested were scam

artists, bitcoin paid for by individuals over the age of 50,

despite finding out in many cases that the elderly individuals

paying for the bitcoin were geographically distant both from the

For instance, a government investigator testified at trial 4

that other bitcoin kiosks required him to scan a piece of government-issued identification (like a driver's license), enter a non-prepaid phone number, provide his name, and communicate with the owner or operator of the kiosk to verify his purchases.

- 6 - recipient of the bitcoin and from others paying to send bitcoin to

the same recipient. And Freeman continued to trade with

individuals after encountering signs that they were not who they

claimed to be.

To establish money laundering, the government called an

undercover agent who had made multiple bitcoin purchases from

Freeman through Telegram and at a kiosk in New Hampshire. After

building a rapport with Freeman through Telegram messages, the

agent joined Freeman at a social gathering in New Hampshire and

explained to Freeman that he was buying bitcoin with money he

earned selling drugs. After this disclosure, Freeman wrote to the

agent that he could not "KNOWINGLY sell bitcoin" to the agent and

refused to conduct business with him over Telegram. He

nevertheless invited the agent to continue socializing with him.

At a gathering in Keene, New Hampshire less than a month later,

the agent asked Freeman if the kiosk he had previously used was

still available. Freeman responded that the kiosk was still there

and said, "I can't tell you that you can use it." The agent went

to the kiosk, located in a bar, and purchased nearly $20,000 in

bitcoin. That same night, the agent also taped Freeman saying in

a conversation with friends (including the agent) over drinks that

"if you fall in love with a guy from Africa, I can't talk you out

of it" and describing his kiosks as a way for smitten victims to

- 7 - "take the money that they have and send it to the person they've

fallen in love with."

In the summer of 2018, the Financial Crimes Enforcement

Network ("FinCEN") of the United States Treasury Department sent

correspondence to an email address associated with Freeman stating

that "Shire Cryptocoin," purportedly one of Freeman's businesses,

must register with FinCEN as a money transmitting business and

comply with other anti-money-laundering regulations.5 Ignoring

this directive, Freeman never registered this entity or any of his

businesses with FinCEN. He also did not file tax returns from

2016 through 2019.

Procedural History

The indictment alleged that Freeman (as well as several

co-defendants) exchanged more than $10 million worth of

government-backed currency for bitcoin between May 25, 2016 and

March 15, 2021. In relevant part, the indictment charged Freeman

5 It's not clear whether Freeman himself used the name "Shire Cryptocoin" in connection with any of his businesses. Also, to be exact, FinCEN wrote that Shire Cryptocoin was a money services business. Under FinCEN's regulations, money transmitting businesses are a subcategory of money services businesses (which are all required to register). 31 C.F.R. § 1010.100(ff)(5) (defining money transmitter as type of money services business); id. § 1022.380(a)(1) (requiring registration of money services businesses). For the sake of simplicity, this opinion will primarily use the term "money transmitting business" or "money transmitter" as resolution of this case does not require us to make fine distinctions between money transmitting businesses and other categories of money services businesses.

- 8 - with operation of an unlicensed money transmitting business,

conspiracy to operate an unlicensed money transmitting business,

money laundering, and conspiracy to commit money laundering, based

on this conduct. It also charged Freeman with several counts of

tax evasion for not paying taxes on income he received from his

bitcoin sales. Freeman joined a motion to dismiss filed by one of

his co-defendants regarding the counts related to operation of an

unlicensed money transmitting business, 18 U.S.C. § 1960, which

invoked the major questions doctrine and argued that businesses

dealing in virtual currency do not come within the statutory

definition of money transmitting businesses (more on the statutory

scheme and relevant definition to come in our analysis). The

district court denied the motion to dismiss in an oral ruling from

the bench, and Freeman proceeded to trial. At the end of an 11-

day trial, a jury convicted Freeman on all counts.

Freeman had moved for a judgment of acquittal after the

close of the government's evidence, and renewed that motion after

trial, arguing that insufficient evidence supported each count.

The district court partially granted that motion, ruling that there

was insufficient evidence that Freeman knowingly laundered money,

but upheld the remaining convictions (including the conspiracy to

commit money laundering count). In the same written order, the

district court recognized that Freeman had incorporated by

reference his earlier motion to dismiss arguments regarding the

- 9 - major questions doctrine and rejected those arguments anew.

Thereafter, Freeman moved for a new trial based on spillover

prejudice from the evidence related to the money laundering count.

He also moved for reconsideration of the court's ruling on the

motion to dismiss. The district court denied both motions, ruling

that they were untimely and unmeritorious.

At sentencing, the district court calculated the

recommended range under the United States Sentencing Guidelines as

210 to 262 months. It then granted Freeman's motion for a variance

and sentenced Freeman to 96 months in prison.6

DISCUSSION

Motion to Dismiss Counts Related to Operation of an Unlicensed Money Transmitting Business

Freeman's appeal largely centers on the major questions

doctrine, a jurisprudential principle fleshed out in a line of

cases emanating from the Supreme Court. The doctrine's purpose is

to prevent administrative agencies from expanding their regulatory

powers beyond that which Congress has granted. See, e.g., Biden

v. Nebraska, 600 U.S. 477 (2023); West Virginia v. EPA, 597 U.S.

697 (2022); Util. Air Regul. Grp. v. EPA, 573 U.S. 302 (2014). To

understand why cases about the scope of an agency's regulatory

More precisely, the district court sentenced Freeman to 60 6

months of imprisonment on tax evasion and the counts related to operation of a money transmitting business to be served concurrently with a 96-month sentence for conspiracy to commit money laundering.

- 10 - power are relevant to Freeman's prosecution for operation of an

unlicensed money transmitting business and his defense thereto, we

need to take a closer look at the statute under which Freeman was

prosecuted.

The indictment charged Freeman with violating 18 U.S.C.

§ 1960 ("Section 1960"). In relevant part, that statute punishes

anyone who "knowingly conducts, controls, manages, supervises,

directs, or owns all or part of an unlicensed money transmitting

business." Id. § 1960(a). "[M]oney transmitting," according to

the statute, "includes transferring funds on behalf of the public

by any and all means." Id. § 1960(b)(2). And an "unlicensed money

transmitting business" means one that "fails to comply with the

money transmitting business registration requirements under

section 5330 of title 31, United States Code, or regulations

prescribed under such section." Id. § 1960(b)(1)(B).

Thus, to understand what it means for a money

transmitting business to be unlicensed, we must flip to 31 U.S.C

§ 5330 ("Section 5330"), which requires "[a]ny person who owns or

controls a money transmitting business" to register that business

"with the Secretary of the Treasury." How can someone tell if

they need to register? Section 5330 defines "money transmitting

business" to include one "who engages as a business in the

transmission of currency, funds, or value that substitutes for

- 11 - currency, including any person who engages as a business in an

informal money transfer system." Id. § 5330(d)(1).

Because the government has deemed his financial

endeavors to be money transmitting businesses, the Section 1960

crime Freeman is charged with is triggered by his failure to comply

with Section 5330(a)(1)'s requirement that such money transmitting

businesses must register with FinCEN (which is a subdivision of

the Treasury Department).7 However, if, as Freeman contends,

Section 5330 does not cover businesses such as his that trade

bitcoin (i.e., if he does not operate a money transmitting business

with registration requirements), he was not violating Section

5330, and by extension no criminal liability under Section 1960

would attach to him.

Of significance to Freeman's argument is one particular

feature of Section 5330. As Freeman points out, when the

indictment against him was filed, the definition in Section

5330(d)(1) looked a little different: it did not include the word

7 Eagle-eyed readers will have remembered that Section 5330(a)(1) referred to registration with the Secretary of the Treasury and never mentioned FinCEN. The Secretary of the Treasury delegated regulatory responsibilities under Section 5330 (which is part of the Bank Secrecy Act) to FinCEN. See generally U.S. Gov't Accountability Off., GAO/GGD-98-18, Money Laundering: FinCEN Needs to Better Communicate Regulatory Priorities and Time Lines 1 (1998). For simplicity's sake, any time Section 5330 gives certain responsibilities to the Secretary of the Treasury, we will substitute in FinCEN as the office of the Treasury Department that carries out that work.

- 12 - "currency" or the phrase "value that substitutes for currency."

Instead, the only noun in the list of items being transmitted was

"funds." Uniting and Strengthening America by Providing

Appropriate Tools Required to Intercept and Obstruct Terrorism Act

("USA PATRIOT Act") of 2001, Pub. L. No. 107-56 § 359(b), 115 Stat.

272, 328 (2001) (codified as amended at 31 U.S.C. § 5330(d)(1)).

In this language difference lies the rub of Freeman's grievance.

For simplicity's sake, we'll refer to the definition of

money transmitting business in effect during the existence of

Freeman's bitcoin business as the "effective definition" and the

new definition, which was enacted in 2021 (more on this legislative

history in a moment), as the "current definition." See William M.

(Mac) Thornberry National Defense Authorization Act for Fiscal

Year 2021 ("NDAA"), Pub. L. No. 116-283 § 6102(d)(2)(A)(i), 134

Stat. 3388, 4552-53 (2021) (codified as amended at 31 U.S.C.

§ 5330(d)).8 Unless we specify otherwise, our analysis (and the

8 For those tracking the dates, it may seem strange that we're saying the current version of Section 5330 was not effective for the purposes of this prosecution, even though the indictment alleges that violations of Section 1960 continued until the date of Freeman's arrest, March 15, 2021, which was more than three months after the current definition became law on January 1, 2021. NDAA § 6102(d)(2)(A)(i), 134 Stat. at 4552-53. Freeman points out that under Section 5330(a)(1), any person who owns or controls a money transmitting business has 180 days to register, and so his time to register under the updated definition had not expired by the time the government put a stop to his business. 31 U.S.C. § 5330(a)(1). The government does not dispute this explanation of why the current version of Section 5330 is ineffective and has not

- 13 - cases we cite) refers to the effective definition of money

transmitting business in Section 5330(d)(1).9

An attentive reader may now be wondering what any of

this has to do with the power of an administrative agency. And,

as we'll see, the government says we shouldn't take up the major

questions doctrine at all because agency authority is not

implicated in these proceedings. This is how Freeman contends the

doctrine factors into this dispute. According to Freeman, Section

5330's effective definition of "money transmitting business"

cannot be properly understood to cover businesses dealing in

virtual currencies like bitcoin, because (and here's where the

link to an administrative agency arises) Section 5330(a)(2)

instructs FinCEN to "prescribe, by regulation, the form and manner

for registering a money transmitting business." 31 U.S.C.

§ 5330(a)(2). Thus, the 2001 effective definition of money

transmitting business, which refers to the transmission of

"funds," seemingly applies to both the statutory registration

requirement in Section 5330(a)(1) and to the scope of FinCEN's

argued that we should analyze the post-amendment conduct any differently from the pre-amendment conduct. And we thus focus our attention on the prior, effective definition. Section 1960 had not been amended since Freeman's offending 9

conduct began, and neither party asserts that any prior amendments to Section 1960 are relevant to our resolution of this case. See Violence Against Women and Department of Justice Reauthorization Act of 2005, Pub. L. No. 109-162 § 1171(a)(2), 119 Stat. 2960, 3123 (2006) (striking surplus words from Section 1960(b)(1)(C)).

- 14 - regulatory authority under Section 5330(a)(2). The major

questions doctrine arises, says Freeman, because we should not

conclude that Congress intended to grant FinCEN regulatory

authority over virtual currencies that did not exist in 2001,

solely by virtue of Congress's use of the word "funds" in the

effective definition in Section 5330(d)(1). And how we interpret

the effective definition necessarily circumscribes the scope of

the statutory registration requirement in Section 5330(a)(1). In

other words, the statutory assumption underlying Freeman's

prosecution (i.e., that Congress's use of the word "funds" in

Section 5330(d)(1) covers virtual currencies) fails under the

major questions doctrine, because, according to Freeman, such an

interpretation runs contrary to congressional intent.

Ultimately then, Freeman's appeal poses the following

question for us: does the effective definition of "money

transmitting business" in Section 5330 capture businesses that

transmit virtual currency? In our opinion, the usual principles

of statutory construction say, resoundingly, yes, and we'll take

a step back to briefly explain why. We'll then dive into the heart

of Freeman's appeal and assess whether the major questions doctrine

nonetheless "provide[s] a reason to hesitate" before definitively

saying yes and adopting that construction. West Virginia, 597

U.S. at 721 (citation and quotation marks omitted). Because this

is a matter of statutory construction, our standard of review is

- 15 - de novo. See United States v. McGlashan, 78 F.4th 1, 6 (1st Cir.

2023).

Traditional Plain Meaning Analysis

We start by analyzing Sections 1960 and 5330 without

reference to the major questions doctrine. In interpreting a

statute, we strive "to effectuate congressional intent." City of

Providence v. Barr, 954 F.3d 23, 31 (1st Cir. 2020). Our usual

starting place for such an inquiry is the statutory text itself.

Id. "[W]e interpret a statute's words based on their plain and

ordinary meaning at the time of the statute's enactment." United

States v. Abreu, 106 F.4th 1, 12 (1st Cir.) (citing Bostock v.

Clayton County, 590 U.S. 644, 654 (2020)), cert. denied, 145 S.

Ct. 425 (2024); City of Providence, 954 F.3d at 31 ("When Congress

uses a term in a statute and does not define it, we generally

assume that the term carries its plain and ordinary meaning.").

In this case, the parties ask us to define a specific

word, "funds," in Sections 1960 and 5330.10 Other courts have been

asked to respond to this same query and those who have done so

have concluded this: that the plain meaning of "funds" is "money"

or " something generally accepted as a medium of exchange, a measure

of value, or a means of payment." United States v. Murgio, 209 F.

The parties analyze the meaning of the word "funds" under 10

both statutes, and neither suggests that the term "funds" should be interpreted differently between Sections 1960 and 5330. Thus, we discuss the meaning of the term "funds" under both statutes.

- 16 - Supp. 3d 698, 707 (S.D.N.Y. 2016) (quoting Webster's Third New

International Dictionary 921 (2002)); see also United States v.

Faiella, 39 F. Supp. 3d 544, 545 (S.D.N.Y. 2014) (citing Merriam

Webster Online). Premised on this definition, with which the

government agrees, other courts have found that bitcoin falls

within the plain meaning of "funds" and that Sections 1960 and

5330 therefore capture businesses that sell bitcoin to customers

in exchange for government-issued currency. See, e.g., United

States v. Stetkiw, No. 18-20579, 2019 WL 417404, at *2 (E.D. Mich.

Feb. 1, 2019) (concluding that bitcoin transactions constitute

"money transmitting" within the meaning of Section 1960); United

States v. Mansy, No. 2:15-cr-198-GZS, 2017 WL 9672554, at *1 (D.

Me. May 11, 2017) (same) (collecting cases); Murgio, 209 F. Supp.

3d at 707-11, 714 (concluding that bitcoin are funds within the

plain meaning of Section 1960 and that indictment sufficiently

alleged failure to comply with Section 5330's registration

requirements). We agree with this judicial reasoning because

bitcoin can be and is used as a currency to make sales and purchases

and, therefore, nicely fits the definition of "funds."11 Murgio,

209 F. Supp. 3d at 707; see also United States v. Iossifov, 45

F.4th 899, 913-14 (6th Cir. 2022) (concluding that bitcoin is a

11 For instance, the evidence at trial showed that the bar where one of Freeman's kiosks was located accepted bitcoin in exchange for food.

- 17 - medium of exchange and qualifies as "funds" within the meaning of

the federal money laundering statute, 18 U.S.C. § 1956); United

States v. Harmon, 474 F. Supp. 3d 76, 88-94, 100-09 (D.D.C. 2020)

(concluding that for similar reasons bitcoin is "money" within the

meaning of the District of Columbia's Money Transmitters Act and

separately concluding that defendant operated an "unlicensed money

transmitting business" within the meaning of Section 1960 where

its "core business was receiving bitcoin and transmitting that

bitcoin to another location or person").

Within our ordinary interpretive framework, our inquiry

into whether the word "funds" covers bitcoin would usually end

here, as there is no reason to look past the statutory text itself

if that text is unambiguous and consistent with a coherent

statutory scheme. Penobscot Nation v. Frey, 3 F.4th 484, 490 (1st

Cir. 2021); City of Providence, 954 F.3d at 31-32 ("Other tools of

statutory interpretation, such as legislative history, customarily

carry significant weight only when the text is ambiguous or its

plain meaning leads to an absurd result."). Indeed Freeman admits

that he has "never argued" that "the ordinary meaning of 'funds'"

does not "encompass[] bitcoin." But as we've already alluded to,

Freeman insists that we cannot stop here because his is "an

exceptional case" wherein ordinary rules of statutory construction

cannot be relied upon to answer the question of whether bitcoin

qualifies as "funds." Rather, only an examination of the major

- 18 - questions doctrine (which takes a deeper dive into congressional

intent) can do that, so we turn to it now. A heads-up here to the

gentle reader: Freeman offers us a slew of arguments as to why he

should prevail on this issue, so we beg your patience as we work

our way through his various contentions.

Major Questions Doctrine

Before we delve into the details of the major questions

doctrine, we pause to address the government's threshold assertion

that we "need not indulge" Freeman's invocation of the doctrine at

all because his criminal prosecution involved no "regulatory

assertions" whatsoever by the Department of Treasury. Rather, it

argues "the indictment neither depended on nor referenced the

FinCEN guidance" and as such, the major questions doctrine "is not

triggered" here. However, we think the government's position

oversimplifies Freeman's argument and here's why.

As our preface noted, the "major questions doctrine" can

arise in cases where we are asked to interpret a legislative

enactment that "confers authority upon an administrative agency"

in the executive branch to implement its terms. West Virginia,

597 U.S. at 721. Here, Freeman's argument centers on the effective

definition of money transmitting business in Section 5330(d)(1).

That statutory definition governs the scope of what businesses are

required to register under Section 5330(a)(1), and in consequence,

what businesses might be subject to criminal penalties under

- 19 - Section 1960(b)(1)(B) for failure to comply with that registration

requirement.12 See United States v. Budovsky, No. 13-cr-00368,

2015 WL 5602853, at *9 (S.D.N.Y. Sept. 23, 2015) ("[C]riminal

liability under § 1960(b)(1)(B) rests in part on a failure to

comply with registration requirements, including those set forth

in § 5330 or in § 5330's regulations."). Simultaneously, the

effective definition (what constitutes a money transmitting

business) governs the scope of the regulations FinCEN can

promulgate in the next subsection, Section 5330(a)(2). See, e.g.,

Ratzlaf v. United States, 510 U.S. 135, 141-43 (1994) (explaining

that willful violation has same meaning under some provisions of

the Bank Secrecy Act, 31 U.S.C. §§ 5322, 5324, as it does in other

provisions, 31 U.S.C. §§ 5314, 5316); United States v. Abbas, 100

F.4th 267, 284 (1st Cir.) (concluding that "proceeds" has same

12 While summarizing the nature of Freeman's convictions in its brief, the government claims that Freeman was also convicted under Section 1960(b)(1)(C). Section 1960(b)(1)(C) defines an unlicensed money transmitting business seemingly independently from Section 5330. See 18 U.S.C. § 1960(b)(1)(C) (defining term to mean a money transmitting business "otherwise involv[ing] the transportation or transmission of funds that are known to the defendant to have been derived from a criminal offense or are intended to be used to promote or support unlawful activity"). The government does not argue, however, that we can ignore Section 5330 because the jury convicted Freeman under Section 1960(b)(1)(C), presumably because the verdict form did not ask the jury to indicate which of the two subsections Freeman had violated. Even if the record could support such an argument, we would treat it as waived given the government's failure to brief the issue. See Mass. Lobstermen's Ass'n v. Menashes, 127 F.4th 398, 403 n.2 (1st Cir. 2025).

- 20 - meaning in different subsections of criminal money laundering

statute, 18 U.S.C. § 1956), cert. denied, 145 S. Ct. 319 (2024).

This statutory scheme makes clear that the legislation's

substantive provisions work hand in hand with those provisions

granting regulatory authority to FinCEN to implement the terms of

the statute itself. Given the necessary interplay between the

statutory and regulatory provisions, we agree with Freeman that

skirting the major questions doctrine would incorrectly treat the

statutory registration requirement as completely divorced from any

of FinCEN's regulatory authority. Indeed, as Freeman pointed out

during oral argument, requiring a business to register by statute

means very little without a corresponding mechanism by which said

business can, in fact, register. For the registration requirement

in Section 5330(a)(1), the regulations FinCEN promulgates under

Section 5330(a)(2) appear to be that mechanism. And although the

government would like us to conclude the major questions doctrine

has no place here, it offers no direct response to this point.

All this to say, Freeman steps over the threshold of identifying

a statute which, at least in part, confers regulatory authority

upon an administrative agency, a power Freeman insists Congress

never intended to delegate.13

We acknowledge that this is a somewhat unusual case for the 13

invocation of the major questions doctrine: FinCEN is not a party and Freeman is seeking to overturn his conviction, not to enjoin

- 21 - Having explained the relationship between this case and

FinCEN's regulation of money transmitting businesses, we must now

determine "whether Congress in fact meant to confer the power the

agency has asserted" as the major questions doctrine requires us

to do. West Virginia, 597 U.S. at 721 (quoting FDA v. Brown

& Williamson Tobacco Corp., 529 U.S. 120, 159 (2000)). "In the

ordinary case," this consideration "has no great effect on the

appropriate analysis." Id. But the Supreme Court has recognized

the existence of "extraordinary cases." Id. In such instances,

we cannot conclude that Congress granted an agency authority "to

exercise powers of vast economic and political significance"

unless the statutory text "speaks clearly" of such a grant. Ala.

Ass'n of Realtors v. Dep't of Health & Hum. Servs., 594 U.S. 758,

FinCEN's regulatory act. Nevertheless, the heart of this appeal is the effective definition of money transmitting business in Section 5330(d)(1), a definition that applies both to Sections 5330(a)(1) and (a)(2). Blinding ourselves (as the government requests) to the reality that our interpretation of Section 5330(d)(1) impacts not only Freeman's criminal liability, but also the scope of FinCEN's regulatory authority, undermines the coherency and consistency of the statutory scheme. See Ali v. Fed. Bureau of Prisons, 552 U.S. 214, 222 (2008). Our sister circuits too have seen fit to consider the application of the major questions doctrine in cases where the relevant administrative agency is not a party and is not actively making "regulatory assertions" in that litigation. See United States v. White, 97 F.4th 532, 540 (7th Cir.) (considering major questions challenge to Sentencing Commission's authority in a criminal case), cert. denied, 145 S. Ct. 293 (2024); N.C. Coastal Fisheries Reform Grp. v. Capt. Gaston LLC, 76 F.4th 291, 296-301 (4th Cir. 2023) (applying major questions doctrine in suit between environmental advocacy group and shrimp trawlers).

- 22 - 764 (2021) (quotation marks omitted) (quoting Util. Air Regul.

Grp., 573 U.S. at 324). In basic terms, the major questions

doctrine tells us that when an administrative agency in the

executive branch wants to do something that is an extraordinarily

big deal, it must show that Congress clearly gave it permission to

do so in the statutory text. See Nebraska, 600 U.S. at 514

(Barrett, J., concurring) (analogizing major questions doctrine to

expectation that a parent authorizing a babysitter to take the

children on an overnight trip would provide "much more clarity

than a general instruction to 'make sure the kids have fun'").

What, then, makes for an extraordinary case? The Supreme

Court defines it in broad strokes as one "in which the 'history

and the breadth of the authority that [the agency] has asserted,'

and the 'economic and political significance' of that assertion,

provide a 'reason to hesitate before concluding that Congress'

meant to confer such authority." West Virginia, 597 U.S. at 721

(quoting Brown & Williamson, 529 U.S. at 159-60). Within this

rather wide framework, our sister circuits, in carefully examining

what the Supreme Court has said about the breadth of an agency's

authority to regulate, have zeroed in on certain "hallmarks that

should send us searching for clear authorization from Congress."14

14Our circuit has addressed the major questions doctrine only in passing since the doctrine was formalized in West Virginia. See Hornof v. United States, 107 F.4th 46, 59 n.14 (2024) (noting

- 23 - N.C. Coastal Fisheries, 76 F.4th at 297 (recognizing that doctrine

is more likely to apply where the agency's asserted powers are

inconsistent with congressional intent, conflict with a distinct

and existing statutory scheme, raise federalism concerns, "fall[]

outside the agency's traditional expertise," are rooted in "an

ancillary provision" of a statute, or are drawn from "old statutes

against a backdrop of an agency failing to invoke them

previously"); see also Bradford v. U.S. Dep't of Lab., 101 F.4th

707, 725-28 (10th Cir. 2024) (rejecting application of major

questions doctrine where agency did not "locate expansive

authority in modest words, vague terms or ancillary provisions,"

was not regulating private industry, did not "discover regulatory

authority for the first time in a long-extant statute," and did

not "lack[] expertise in the relevant area of policymaking"

(citation modified)), cert. denied, 145 S. Ct. 1047 (2025). Our

review of the Supreme Court's precedent and of our sister circuits'

helpful interpretation of it convinces us that this case lacks the

hallmarks of a major questions case. We'll explain our thinking

below around the two organizing principles identified by the

Supreme Court, starting with "the history and the breadth" of

FinCEN's assertion of authority and follow that with addressing

that statute enabling Coast Guard to regulate oil tankers "speak[s] clearly").

- 24 - its "economic and political significance."15 West Virginia, 597

U.S. at 721; see Nebraska v. Su, 121 F.4th 1, 14 (9th Cir. 2024)

(identifying a "two-prong framework").

History and Breadth of FinCEN's Assertion

History

To understand the "history and breadth" of FinCEN's

regulation as is relevant here, a short history of Section 5330 is

in order.16 As part of a statutory scheme (the Bank Secrecy Act)

designed to combat money laundering, Congress has long required

"money transmitting businesses" to register with the Treasury

Department. Riegle Community Development and Regulatory

Improvement Act of 1994, Pub. L. No. 103-325 § 408, 108 Stat. 2160,

2249-51 (1994) (codified at 31 U.S.C. § 5330). In the wake of the

September 11, 2001 terrorist attacks, Congress that year amended

15 In so doing, we acknowledge that the major questions doctrine has been an area of dynamic development in the last few years, and it is not always clear what factors fall under which prong. For instance, a discussion of the wider statutory scheme and legislative history might well be introduced as a relevant piece of the agency's regulatory history or as indicative of the political significance of the regulatory assertion. In today's decision, we place less importance on categorizing the relevant characteristics and focus on whether the facts of this case, stripped of Freeman's rhetorical flourishes, actually fit into the major questions precedent. 16 Our focus is on the legislative history of Section 5330 rather than Section 1960, because (1) that is what the parties briefed and (2) Section 5330, which enables agency regulation, is more squarely implicated by the major questions doctrine than Section 1960, which focuses on the circumstances of criminal liability.

- 25 - the definition of "money transmitting business" in Section 5330 to

include "any other person who engages as a business in the

transmission of funds, including any person who engages as a

business in an informal money transfer system or any network of

people who engage as a business in facilitating the transfer of

money domestically or internationally outside of the conventional

financial institutions system." USA PATRIOT Act § 359(b), 115

Stat. at 328 (emphases added). According to the report of the

Committee on Financial Services, the amendment did not expand the

definition of money transmitting business, but instead clarified

that the existing definition reached black market, non-bank money

exchangers —— what the Committee referred to as "informal value

transfer banking systems" —— which helped to fund terrorist and

criminal organizations. H.R. Rep. No. 107-250, at 34, 63-64

(2001).

This was the effective version of Section 5330 when

bitcoin came into being in 2008. Perkins, supra, at 2. In

Freeman's telling though, FinCEN's first step towards the

regulation of bitcoin didn't occur until 2011, when FinCEN updated

its regulatory definition of "money transmission services" to

require the "acceptance of currency, funds, or other value that

substitutes for currency from one person." Bank Secrecy Act

Regulations; Definitions and Other Regulations Relating to Money

Services Businesses, 76 Fed. Reg. 43585, 43596 (July 21, 2011)

- 26 - (codified at 31 C.F.R. § 1010.100(ff)(5)) (emphasis added). Such

a theory, he argues, is consistent with the guidance FinCEN issued

in 2013 which, for the first time, stated that "value that

substitutes for currency" includes virtual currencies.

Specifically, the guidance said, "[t]he definition of a money

transmitter does not differentiate between real currencies and

convertible virtual currencies. Accepting and transmitting

anything of value that substitutes for currency makes a person a

money transmitter under the regulations implementing the [Bank

Secrecy Act]."17 FinCEN, FIN-2013-G001, Application of FinCEN's

Regulations to Persons Administering, Exchanging, or Using Virtual

Currencies, at 3 (2013). Freeman says the fact that FinCEN never

sought to regulate bitcoin before 2013 demonstrates the agency's

understanding of its statutory inability to do so. Needless to

say, the government takes issue with Freeman's historical

FinCEN laid out precise definitions for "real currency," 17

"convertible currency," and "virtual currency" in its 2013 guidance. FIN-2013-G001, at 3. For the purposes of this opinion, it suffices to say that "real currency" is equivalent to what we have been calling "fiat currency" and that bitcoin is a form of "convertible virtual currency." The guidance clarified that the fact that a business exchanged bitcoin instead of fiat currency would not exempt it from registration as a money transmitter. Id. at 2 (explaining that "a person engaged as a business in the exchange of virtual currency for real currency, funds, or other virtual currency" is a money transmitter under FinCEN's regulation).

- 27 - interpretation,18 but neither party has pointed to any evidence

that FinCEN engaged in any enforcement activities against

businesses transmitting bitcoin which sought to compel them to

register (or comply with other regulations) prior to issuance of

the 2013 guidance. And for the purposes of this opinion, we'll

operate with the understanding that FinCEN, at least, first began

to regulate businesses that transmit virtual currencies in 2013.

Doing so lets us focus on the parties' key dispute: whether

FinCEN, nonetheless, had statutory authority to regulate virtual

currencies when it issued the 2013 guidance.

Freeman would like us to conclude it "inconceivable" (as

he tells it) that the single word "funds" as contained in the

effective version could refer to virtual currency, but we believe

his focus on that single word is misplaced and here's why. In

full, the effective definition (when bitcoin was created)

specified that businesses engaged in the "transmission of funds"

could include an "informal money transfer system . . . outside of

the conventional financial institutions system." USA PATRIOT Act

§ 359(b), 115 Stat. at 328. Bitcoin and virtual currencies seem

Freeman takes the view that FinCEN did not begin regulating 18

bitcoin until "long after the invention of bitcoin" in 2008, when it added the phrase "value that substitutes for currency" into its regulations and then interpreted that phrase to refer to virtual currencies. The government claims that FinCEN was regulating virtual currencies all along and that FinCEN's actions in 2011 and 2013 merely "confirmed" its existing regulatory scheme.

- 28 - to fall within this broad definition of a system that allows users

to transfer money without the participation of banks or other

traditional money movers. Freeman argues that in utilizing this

language in the 2001 amendment, Congress intended to target a

different informal money system -- "the ancient South Asian money

exchange system called hawala" and other "hawala-type systems."19

But we find this to be a strained reading of the Committee Report

accompanying the 2001 legislation. A more natural reading is that

Congress was more generally concerned about "underground black

market banking systems," whatever the form, H.R. Rep. No. 107-250,

at 33, and described hawalas as simply one example of the "informal

value transfer banking systems" on which FinCEN should focus

attention, id. at 63-64. Moreover, Congress highlighted

particular characteristics of "value transfer systems" that are

equally true of today's bitcoin use, including that such systems

frequently operated through "messages relating to receipt or

disbursement of funds" rather than transfer of physical funds

themselves, and that they were preferred by criminals because of

19 According to the findings of the House Committee on Financial Services, "hawala" is the word for an "ancient South Asian money exchange system" which "consists of an international network of non-bank financial agents, often built on trusted family or cultural relationships." H.R. Rep. NO. 107-250, at 34. These trusted relationships permit value to be transferred based on messages rather than the physical movement of funds from one party to another. Id. Presumably, when Freeman refers to "hawala-type systems," he refers to value transfer systems that function in a similar manner.

- 29 - "the lack of record-keeping and opportunity for anonymity." Id.

at 34. Importantly, Congress believed that these sorts of

alternative transfer systems were "already adequately covered" by

the pre-2001 version of Section 5330. Id. at 63-64. The Committee

Report gives us no reason to think that a non-bank system allowing

people to transfer value using messages between trusted parties

should be treated differently than one which accomplishes the same

purpose using cryptographic protocols between strangers.

And even if we adopted Freeman's approach and looked at

the word "funds" in isolation, we'd be hard-pressed to think it

"inconceivable" that Congress would have intended "funds" to reach

cryptocurrency given that judicial decisions dating back to 2008

had already interpreted "funds" expansively to capture non-

physical currency. See, e.g., United States v. E-Gold, Ltd., 550

F. Supp. 2d 82, 85, 94-97 (D.D.C. 2008) (concluding that Section

5330's definition of money transmitting business included internet

service which allowed users to exchange fiat currency for digital

currency).20

20We are mindful, as Freeman points out, that the virtual currency at issue in E-Gold is not a "cryptocurrency" like bitcoin. See 550 F. Supp. 2d at 85; FIN-2013-G001, at 3 & n.13 (describing e-currencies and e-precious metals as a system where a broker or dealer electronically distributes digital certificates of ownership of fiat currency or precious metals); see also supra note 2. But the fact that e-gold was backed by precious metals while bitcoin transactions are recorded on a cryptographic ledger is not a difference-maker in our current analysis because FinCEN

- 30 - Nor does Freeman, relative to his historical argument,

make a showing that FinCEN has engaged in the sort of about-face

agency behavior typically found in the major questions cases. That

is significant because the Supreme Court, in applying the doctrine,

has particularly scrutinized with suspicion when an agency

reverses course on its long-standing decision not to regulate in

a particular field or in a particular manner. See West Virginia,

597 U.S. at 710-11, 713, 724 (striking regulation requiring

electricity generators to undergo sector-wide switch to sources

that produced less carbon dioxide, where EPA had previously only

exercised power under Section 111 of the Clean Air Act to set

emissions limits for individual plants). FinCEN had no history of

explicitly disclaiming its authority to regulate virtual currency

(or any other type of "informal transfer banking system") prior to

its 2011 and 2013 updates to its regulatory regime. Cf. Brown

& Williamson, 529 U.S. at 143-48 (concluding that the Food and

Drug Administration's ("FDA") decades-long position that it had no

jurisdiction over tobacco products and Congress's implicit

ratification of that position in subsequent tobacco-specific

views and treats both "e-precious metals" and cryptocurrencies as convertible virtual currencies. 2013 Guidance at 3. Nor do we understand why Freeman highlights that "the e-Gold indictment explicitly relied on FinCEN's implementing regulations" as a point of distinction. After all, Freeman similarly claims his prosecution relies on FinCEN's implementing regulations (which is the premise for applying the major questions doctrine).

- 31 - legislation demonstrated a lack of legislative intent to delegate

authority over tobacco products to the FDA).

And simply because FinCEN declined to exercise such

authority prior to issuance of the 2013 guidance can hardly, by

our lights, be held against it; by Freeman's count, the agency

acted only five years after bitcoin was invented.21 The five-year

delay —— if we can call it such —— is understandable because the

money laundering risk posed by bitcoin and other cryptocurrencies

(and thus the need for targeted regulation) may not have been

instantly apparent upon bitcoin's invention. Cf. Ocean State

Tactical, LLC v. Rhode Island, 95 F.4th 38, 50 (1st Cir. 2024)

("Law advances more slowly than the technology it regulates, but

must nonetheless be able to respond when the ramifications of a

technological development become more apparent over time."). Plus

five years is a far cry from the decades of regulatory inaction

emphasized in the Supreme Court's major questions cases. See,

e.g., West Virginia, 597 U.S. at 734 (noting that "it is pertinent

to our analysis that EPA has acted consistent with such a

limitation [on its regulatory power] for the first four decades of

the statute's existence"); Ala. Ass'n of Realtors, 594 U.S. at 761

21In fact, FinCEN proposed the addition of the phrase "value that substitutes for currency" as early as 2009, the year following bitcoin's invention. Amendment to the Bank Secrecy Act Regulations-Definitions and Other Regulations Relating to Money Services Businesses, 74 Fed. Reg. 22129, 22137, 22142 (proposed May 12, 2009) (to be codified at 31 C.F.R. pt. 103).

- 32 - (explaining that 1944 statutory provision had "rarely been

invoked —— and never before to justify an eviction moratorium";

instead "[r]egulations under this authority have generally been

limited to quarantining infected individuals and prohibiting the

import or sale of animals known to transmit disease"). In 2008,

cryptocurrencies were an emerging technology whose significance

within the money transfer marketplace was less than clear.

Freeman's own brief indicates that the market capitalization of

bitcoin in July 2010, roughly two years after its invention, was

only $200,000, a pittance in the nation's overall financial scheme,

and perhaps one not yet worthy of an expenditure of the limited

resources Congress appropriates to FinCEN.

"Subsequent" History

Unable to find a firm foothold in the history leading up

to FinCEN's exercise of regulatory authority over bitcoin, Freeman

points to events that occurred after FinCEN's issuance of the 2013

guidance. Reliance on this sort of "subsequent" history is rather

unorthodox. As the government notes, we've previously warned

against using the views of a later Congress to interpret "the

meaning of statutes enacted by an earlier Congress" when conducting

traditional statutory interpretation. Parlane Sportswear Co. v.

Weinberger, 513 F.2d 835, 837 n.2 (1st Cir. 1975); see also

Bruesewitz v. Wyeth LLC, 562 U.S. 223, 242 (2011) ("Post-enactment

legislative history (a contradiction in terms) is not a legitimate

- 33 - tool of statutory interpretation."); Doe v. Chao, 540 U.S. 614,

626–27 (2004) ("[W]e have said repeatedly that subsequent

legislative history will rarely override a reasonable

interpretation of a statute that can be gleaned from its language

and legislative history prior to its enactment." (citation and

quotation marks omitted)). Tellingly, Freeman does not cite to a

single major questions case when arguing that these subsequent

events call for an alternative interpretation of Section 5330.

But as best we can glean, he believes that certain events post-

dating the 2013 guidance amount to noteworthy hallmarks of the

major questions cases.

First, Freeman discusses subsequent legislative activity

related to the regulation of virtual currencies, including failed

legislation and the 2021 amendment that enacted the current

definition of "money transmitting business" in Section 5330, and

concludes that Congress "considered and repeatedly rejected

legislation" that would have expressly empowered FinCEN to

regulate virtual currencies. Second, Freeman identifies

statements that FinCEN made regarding virtual currencies after

issuing the 2013 guidance and claims the statements reveal that

"the agency recognized that the statute did not authorize the

regulation" but nevertheless "expanded" its authority "before the

authorization from Congress." Accepting Freeman's

characterization of these occurrences, we see there may be some

- 34 - facial resemblance between these facts and a major questions case.

See Util. Air Regul. Grp., 573 U.S. at 321 (explaining that "EPA

itself has repeatedly acknowledged" that proposed regulation

"would overthrow" the "structure and design" of the enabling act);

Brown & Williamson, 529 U.S. at 144 (explaining that "Congress

has acted against the backdrop of the FDA's consistent and repeated

statements that it lacked authority under the FDCA to regulate

tobacco" and "considered and rejected bills that would have granted

the FDA such jurisdiction"). But given the Supreme Court's

eschewal of the importance of post-enactment legislative history

outside the major questions context, we express skepticism of these

events' relevance. See Bruesewitz, 562 U.S. at 242; Chao, 540

U.S. at 626–27. That said, despite our skepticism, in the absence

of a clear statement by the Supreme Court that subsequent history

has no bearing on the major questions determination,22 and given

the presence of thorough briefing from both parties on the point,

we will consider whether what happened after FinCEN issued its

2013 guidance influences our analysis of Freeman's argument.

22 In some instances, the Court's major questions cases have referenced congressional acts or omissions that post-date the agency's challenged regulatory assertion, but without relying on them to resolve the major questions determination. See Ala. Ass'n of Realtors, 594 U.S. at 760, 766 (recounting Congress's failure to enact multiple extensions of CDC's challenged eviction moratorium and noting that "Congress was on notice that a further extension would almost surely require new legislation, yet it failed to act in the several weeks leading up to the moratorium's expiration").

- 35 - In our view, the subsequent history only confirms that

FinCEN's interpretation of the breadth of its authority to regulate

was consistent with congressional intent. That is because "when

Congress revisits a statute giving rise to a longstanding

administrative interpretation without pertinent change, the

'congressional failure to revise or repeal the agency's

interpretation is persuasive evidence that the interpretation is

the one intended by Congress.'" Commodity Futures Trading Comm'n

v. Schor, 478 U.S. 833, 845-46 (1986) (citation omitted)

(concluding that deference to agency's interpretation was

warranted where Congress had twice amended the statute without

overruling the agency's assertion of jurisdiction); see Am. Forest

Res. Council v. United States, 77 F.4th 787, 801 n.16 (D.C. Cir.

2023), cert. denied, 144 S. Ct. 1110 (2024); Strickland v. Me.

Dep't of Hum. Servs., 96 F.3d 542, 547 (1st Cir. 1996). Typically,

courts invoke this principle of statutory interpretation to infer

legislative approval from Congress's silence and inaction, such as

when Congress re-enacts a statute without amendment to the portion

on which the agency has relied. See Clean Harbors Env't Servs.,

Inc. v. Herman, 146 F.3d 12, 20 (1st Cir. 1998); Strickland, 96

F.3d at 547. We think it applies with even more force when, as

here, an agency informs Congress of its interpretation of its

statutory authority and Congress affirmatively revises the

relevant statute to codify that interpretation. See Altman v.

- 36 - SEC, 666 F.3d 1322, 1326 (D.C. Cir. 2011) (upholding SEC's

interpretation of enabling statute and explaining that SEC's rules

of practice were codified in 2002); cf. Tex. Dep't of Hous. & Cmty.

Affs. v. Inclusive Communities Project, Inc., 576 U.S. 519, 537-38

(2015) (explaining that Congress "presupposed" the existence of

disparate impact claims under the Fair Housing Act when it

subsequently added exemptions from disparate impact claims into

the statute). And to repeat, that's exactly what happened here.

In the years following FinCEN's issuance of the 2013

guidance, FinCEN informed Congress on multiple occasions that it

had been regulating virtual currency exchangers as businesses that

transmit "value that substitutes for currency." Illicit Use of

Virtual Currency and the Law Enforcement Response: Hearing Before

the Subcomm. on Terrorism and Illicit Fin. of the H. Comm. on Fin.

Servs. 9, 25 (2018) (statement of Thomas Ott, Associate Director,

FinCEN Enf't Division) (testifying that "value that substitutes

for currency" is "sufficient to cover virtual currency")

[hereinafter H. Hrg. 115-102]; The Present and Future Impact of

Virtual Currency: Joint Hearing Before the Subcomm. on Econ. Pol'y

and Subcomm. on Nat'l Sec. and Int'l Trade and Fin. of the S. Comm.

on Banking, Hous., and Urban Affs., 113th Cong. 8, 11 (2013)

(statement of Jennifer Shasky Calvery, Director, FinCEN)

(testifying that FinCEN was "able to cover [virtual currency] under

our pre-existing definitions and regulations, which include the

- 37 - concept of other value that substitutes for currency")

[hereinafter S. Hrg. 113-210]. Indeed FinCEN wrote to a Senate

committee that FinCEN "would not object to Congress considering

codifying elements of money transmission to involve the

transmission of currency, as well as value that substitutes for

currency." Combatting Money Laundering and Other Forms of Illicit

Finance: Regulator and Law Enforcement Perspective on Reform:

Hearing Before the S. Comm. on Banking, Hous., and Urb. Affs.,

115th Cong. 59, 62 (2018) (written statement of Kenneth A. Blanco,

Director, FinCEN). As we previewed earlier, Congress subsequently

added "currency" and "value that substitutes for currency" into

the definition of "money transmitting business" in Section

5330(d)(1). NDAA § 6102(d)(1)(2), 134 Stat. at 4553. In our view,

that Congress not only declined to criticize or correct FinCEN's

approach (despite having been informed of it on more than one

occasion), but instead chose to codify it, strongly suggests that

FinCEN's interpretation was consistent with Congress's intent.

Freeman takes an alternative view of the same sequence

of events, arguing that we should treat the 2021 amendment instead

as evidence that the effective definition could not have supported

FinCEN's earlier reading. This view relies on a principle of

statutory interpretation that tells us to give meaning to the words

of a statute in a manner that avoids redundancies. See City of

Providence, 954 F.3d at 43. (We usually call this principle the

- 38 - canon against superfluities or canon against surplusage.) To

follow Freeman's logic, if "funds" pre-2021 already captured

virtual currencies, it would be unnecessary to add language to the

statute that also refers to virtual currencies. Because it is

undisputed that Congress intended the addition of the phrase "value

that substitutes for currency" to refer to virtual currencies, see

NDAA § 6102(a) 134 Stat. at 4552, we should presume that the

previous formulation of the statute did not capture this meaning.

But we have previously warned that the canon against

superfluities "is not a straitjacket" and "should not, therefore,

be employed inflexibly to rule out every interpretation of a

statute that treats certain language as illustrative or

clarifying." City of Providence, 954 F.3d at 43 (concluding that

amendment "appears calculated to remove any doubt" that executive

officer could exercise particular power consistent with

pre-existing statutory authority). The prefatory language to the

2021 amendment, NDAA § 6102(a), 134 Stat. at 4552, supports reading

the addition of "value that substitutes for currency" as stressing

that regulation of virtual currencies should be a FinCEN priority,

rather than as giving FinCEN permission to regulate virtual

currencies for the first time. NDAA § 6102(a)(4), 134 Stat. at

4552 (explaining that FinCEN should "mak[e] sure that steps to

address emerging methods of such illicit financing [like virtual

currencies] are high priorities"); see Jerman v. Carlisle,

- 39 - McNellie, Rini, Kramer & Ulrich LPA, 559 U.S. 573, 592 (2010)

(explaining that "Congress may simply have intended to codify

existing judicial interpretations to remove any potential for

doubt in jurisdictions where courts had not yet addressed the

issue").

And it's worth noting that Congress also has a history

of revising the Section 5330 definition of "money transmitting

businesses" for the purpose of clarification, rather than

substantive expansion. H.R. Rep. No. 107-250, at 63-64 ("Although

the Committee believes that informal value transfer banking

systems like hawalas are already adequately covered by references

to money transmitting businesses in certain provisions of existing

law, this section makes that understanding explicit."). Under

these circumstances, we need not blindly apply the canon against

surplusage to invalidate an agency regulation that Congress deemed

worthy of codification. See Bufkin v. Collins, 145 S. Ct. 728,

742 (2025) ("[S]ometimes the better overall reading of the statute

contains some redundancy." (citation omitted)); City of

Providence, 954 F.3d at 43.

Freeman nevertheless insists that "Congress struggled

with deciding how to classify and regulate virtual currencies" and

"considered and repeatedly rejected legislation to assign

regulatory authority to agencies like FinCEN." See West Virginia,

597 U.S. at 731. But his position does not hold up to scrutiny.

- 40 - To begin with, the legislative record simply doesn't show the sort

of "struggle" that Freeman claims exists. In support of his

contention, Freeman first points to the FinCEN Improvement Acts of

2018 and 2019, two bills that passed in the House of

Representatives but failed in the Senate. H.R. 6411, 115th Cong.

(2018); H.R. 1414, 116th Cong. (2019). In relevant portion, these

bills would have revised FinCEN's duty and power to "[c]oordinate

with financial intelligence units in other countries on anti-

terrorism and anti-money laundering initiatives," 31 U.S.C.

§ 310(b)(2)(H), to specifically "includ[e] matters involving

emerging technologies or value that substitutes for currency."

H.R. 6411, § 3; H.R. 1414, § 3. But those bills did not address

the definition of money transmitting business. Freeman also points

us to the Improving Laundering Laws and Increasing Comprehensive

Information Tracking of Criminal Activity in Shell Holdings Act

("ILLICIT Cash Act"), S. 2563 § 308, 116th Cong. (2019), which

would have revised the definition of "money transmitting business"

in Section 5330 to include "value that substitutes for currency."

Freeman emphasizes that this bill "failed to even make it out of

committee." Yet he concedes that the text of this bill eventually

"formed the basis for the [anti-money laundering] provisions of

the 2021 NDAA." In other words, while Congress did fail to pass

the ILLICIT Cash Act, it adopted the relevant language from this

- 41 - bill two terms later as part of the 2021 amendment. NDAA § 6102,

134 Stat. at 4552-53. Let us further explain.

In a major questions case, an agency's assertion that it

can regulate in a manner in which Congress has refused to legislate

might give us reason to question whether the agency is contravening

congressional intent. See West Virginia, 597 U.S. at 731 (applying

major questions doctrine where EPA enacted program to reduce

greenhouse gas emissions despite Congress's rejection of similar

proposals); Ala. Ass'n of Realtors, 594 U.S. at 760 (explaining

that Centers for Disease Control ("CDC") "decided to do what

Congress had not" by imposing administrative eviction moratorium

after Congress declined to extend its own statutory moratorium).

But what we've chronicled as per Freeman's argument is hardly the

sort of history that calls for application of the major questions

doctrine. FinCEN did not watch Congress reject a proposal to

regulate virtual currency exchanges as money transmitting

businesses, only to sua sponte take up the same proposal itself.

Instead, the bills that Freeman identifies were all introduced

after FinCEN started regulating virtual currencies in 2013, and

each bill would have codified FinCEN's "value that substitutes for

currency" formulation, rather than curtailing any perceived

administrative overreach. The bill containing the broadest

amendment ultimately was incorporated into legislation that

passed, codifying FinCEN's interpretation. See NDAA § 6102, 134

- 42 - Stat. at 4552-53; ILLICIT Cash Act S. 2563 § 308. None of the

Supreme Court's major questions cases have overturned agency

action when a Congress takes the agency interpretation being

challenged and chooses to enact it into law.23

Finally, Freeman claims that "FinCEN admitted that it

had to expand its authority beyond the statutory language to

capture virtual currency." He seemingly raises this argument

because at times, the Supreme Court has emphasized that the

agency's express disclaimer of its authority to regulate a

particular industry or in a particular manner shows that a later

attempt to assert the same authority exceeds the bounds of the

23 The Supreme Court came closest to doing so in Alabama Association of Realtors, 594 U.S. 758. That case involved a challenge to an eviction moratorium issued by the CDC after Congress had allowed a legislative eviction moratorium to expire. Id. at 760. When the CDC's administrative moratorium was set to expire for the first time, Congress passed legislation extending the CDC's moratorium for one month, but subsequently declined to extend the moratorium any further. Id. The CDC nevertheless renewed the moratorium several times. Id. The Court's analysis in its per curiam opinion focused on the political and economic significance of the eviction moratorium rather than on whether Congress's subsequent legislative activity (and inactivity) amounted to tacit approval (or disapproval) of the moratorium. Id. at 764-65. In any event, Congress's one-month extension of the eviction moratorium did not amount to a word-for-word codification of the agency's interpretation of its statutory authority into the enabling statute, as occurred in this case. See Consolidated Appropriations Act, 2021, Pub. L. No. 116–260, § 502, 134 Stat. 1182, 2078–2079 (2020) (stating simply that CDC's order "is extended through January 31, 2021" without amending enabling statute). And, moreover, Freeman does not attempt to argue that Alabama Association of Realtors stands for the proposition that the major questions doctrine applies even when Congress expressly approves of the agency's decision.

- 43 - governing statute. See Util. Air Regul. Grp., 573 U.S. at 321

("EPA itself has repeatedly acknowledged that applying the PSD and

Title V permitting requirements to greenhouse gases would be

inconsistent with —— in fact, would overthrow —— the Act's

structure and design."); Brown & Williamson, 529 U.S. at 146

(noting FDA's "disavowal of jurisdiction" over tobacco products).

But we see no such history of disclaimer here. The supposed agency

admissions Freeman refers to in support of his argument are various

statements made by FinCEN officials in testimony before Congress

and in a bar association speech. See, e.g., Crypto Crime in

Context: Breaking Down the Illicit Activity in Digital Assets:

Hearing Before the Subcomm. on Digit. Assets, Fin. Tech. and

Inclusion of the H. Comm. on Fin. Servs., 118th Cong. (2023)

(witness statement of Jane Khodarkovsky, Former Trial Att'y and

Hum. Trafficking Fin. Specialist, Dep't of Justice) (no official

transcript of hearing available) (quoted material appears on page

11 of written witness statement), https://perma.cc/7RBZ-CPWX

[hereinafter Khodarkovsky Statement]; H. Hrg. 115-102, supra, at

9, 25 (statement of Thomas Ott, Associate Director, FinCEN Enf't

Division); S. Hrg. 113-210, supra, at 5, 36 (statement of Jennifer

Shasky Calvery, Director, FinCEN); FinCEN, Prepared Remarks of

FinCEN Acting Dir. Him Das Delivered Virtually at the American

Bankers Association/ American Bar Association Financial Crimes

Enforcement Conference (Jan. 13, 2022), https://perma.cc/JXQ9-

- 44 - BLNR. In Freeman's telling, these statements acknowledge that

FinCEN lacked statutory authorization to regulate virtual

currency.

As an initial matter, we note that Freeman's argument

appears to be an odd fit with the major questions cases, where a

later assertion of authority contradicts an earlier disclaimer.

That is so because each of the statements Freeman references

post-date FinCEN's assertion in 2013, that virtual currency

exchangers were subject to its regulations. And when we take a

closer look at the statements Freeman has identified, we do not

see FinCEN acknowledging any discrepancy between its statutory

authority and its regulatory assertion (as Freeman claims it has).

Most of these statements express FinCEN's concerns that virtual

currencies might not be adequately addressed by the pre-existing

regulatory framework (rather than concerns about any gap in the

statutory scheme) and inform Congress of how FinCEN had updated

its definitions to be in sync with Congress's statutory intent.

See, e.g., S. Hrg. 113-210, supra, at 5, 36 (warning that virtual

currencies are preferred by "[i]llicit actors" in part because

they "provide[] a loophole from the [anti-money laundering and

combatting the financing of terrorism] regulatory safeguards in

most countries around the world" and explaining that FinCEN's

regulatory guidance, rulings, and updates "have been able to

accommodate the development of new payment systems, including

- 45 - virtual currency"); H. Hrg. 115-102, supra, at 9, 25 (statement of

Thomas Ott, Associate Director, FinCEN Enf't Division) (recounting

regulatory acts intended to address virtual currencies and

testifying that the "regulatory regime right now, that we have in

place, is sufficient to cover virtual currency . . . whether or

not . . . a money transmitter is located within the continental

United States"); Das, supra ("[W]e need a regulatory regime to

match, one that accounts for crypto and other digital assets,

evolution in the payments space, and other innovations that are

driving the creation of new products, services, and delivery

channels.").24 Another simply acknowledges the codification of

FinCEN's existing interpretation in 2021. Khodarkovsky Statement,

supra, at 11. None of these statements amounts to an admission

that FinCEN lacked statutory authority to regulate virtual

currency exchangers as money transmitting businesses.

Freeman also latches onto the following sentence from a

2019 guidance document issued by FinCEN stating, "The term 'other

Freeman also claims that "[a] former acting director of 24

FinCEN, Himamauli Das, stated that the 2021 updates to the Patriot Act, including the amendment to § 5330, were necessary because the 2001 law 'never anticipated the challenges of the 2020s: digital assets . . . ." Appellant's Br. 49 (alterations in original) (quoting Das, supra). But of course, Congress did not need to "anticipate" the application of Section 5330 to virtual currencies in order for FinCEN to apply the statute's plain terms. See Bostock, 590 U.S. at 683. Nor does a high-level remark on the need to modernize the anti-money laundering legal framework amount to an admission that FinCEN had no statutory authority over virtual currencies until passage of the 2021 law.

- 46 - value that substitutes for currency' encompasses situations in

which the transmission does not involve currency, or funds, but

instead involves something that the parties to a transaction

recognize has value that is equivalent to or can substitute for

currency." FinCEN, Application of FinCEN's Regulations to Certain

Business Models Involving Convertible Virtual Currencies, FIN-

2019-G001, at 4 (2019).25 According to Freeman, this sentence

shows that FinCEN recognized that "funds" are different from "value

that substitutes for currency" and "that the word 'funds' in the

2001 version of § 5330 did not capture virtual currency." We note,

however, that the 2019 guidance does not mention Section 5330 at

all and does not attempt to define the meaning of "funds," even

within the limited universe of the guidance document. Elsewhere

in the same document, the word "funds" is used when referring to

convertible virtual currencies. FIN-2019-G001, at 15, 19

(referring to "funds" held in virtual currency wallets and "funds"

accepted and retransmitted by service providers that anonymize

virtual currency transactions). To read FinCEN's use of "funds"

in this guidance document as a disclaimer of its statutory

authority to regulate virtual currency under Section 5330 would

simply blink reality.

Freeman's brief incorrectly identifies the source of this 25

sentence as the 2013 guidance. The language Freeman quotes actually appears in a separate document. FIN-2019-G001, at 4.

- 47 - Breadth

With the relevant history in mind, we examine the breadth

of the power FinCEN has asserted, another factor the Supreme Court

has directed us to consider as we decide if "hesitation" is called

for before we affirm an agency's claim of regulatory authority.

See West Virginia, 597 U.S. at 721. To begin, we do not buy

Freeman's argument that FinCEN "claim[ed] to discover in a long-

extant statute an unheralded power." Util. Air Regul. Grp., 573

U.S. at 324. In requiring virtual currency transmitters to

register, FinCEN was not regulating in an "unheralded" or

"unprecedented" manner, West Virginia, 597 U.S. at 724-25, 728

(citations omitted) (explaining that EPA had never before

attempted to systemically reduce emissions by "'shifting'

polluting activity 'from dirtier to cleaner sources'" (citations

omitted)), nor was FinCEN relying on an obscure, "ancillary" or

"gap filler" statutory provision, id. at 724. To the contrary,

that agency has continuously relied on Section 5330 as authority

to regulate money transmitters since 1994. See Riegle Community

Development and Regulatory Improvement Act of 1994, Pub. L. No.

103-325 § 408, 108 Stat. 2160, 2249-51 (1994) (codified at 31

U.S.C. § 5330). All it did in 2013 was explicitly specify that

businesses transmitting virtual currency would be treated the same

as those transmitting physical currency. In short, this

"unheralded power" argument is doomed because FinCEN's regulation

- 48 - of bitcoin is not the kind of "unprecedented" program, one so

unlike FinCEN's historical approach to regulation, that would call

for application of the major questions doctrine. See Biden v.

Missouri, 595 U.S. 87, 90-91, 94 (2022) (holding that Secretary of

Health and Human Services did not exceed statutory authority in

promulgating rule conditioning receipt of Medicaid and Medicare

funds on vaccination of healthcare providers where "the Secretary

routinely imposes conditions of participation that relate to the

qualifications and duties of healthcare workers"); cf. Nebraska,

600 U.S. at 501 (reversing program by Secretary of Education to

cancel loan obligations where "Secretary has never previously

claimed powers of this magnitude under the HEROES Act" and "past

waivers and modifications issued under the Act have been extremely

modest and narrow in scope"); Ala. Ass'n of Realtors, 594 U.S. at

765 (concluding that CDC could not impose eviction moratorium in

counties experiencing substantial or high levels of COVID-19

transmission where since the enactment of the claimed statutory

authority in 1944, "no regulation premised on it has even begun to

approach the size or scope of the eviction moratorium").

Nor in challenging FinCEN's breadth of reach does

Freeman attempt to argue that FinCEN's exercise of regulatory

authority over virtual currency transmitters somehow falls outside

its "sphere of expertise." See Nat'l Fed'n of Indep. Bus. v. OSHA,

595 U.S. 109, 117-18 (2022) (explaining that a "broad public health

- 49 - measure[]," like a vaccine mandate, was "outside of OSHA's sphere

of expertise" and was not authorized by 29 U.S.C. § 655(b)).

FinCEN's enumerated statutory duties and powers specifically

include analysis of "emerging trends and methods in money

laundering and other financial crimes" and the identification of

"emerging threats" and "emerging technology" to assist in federal

investigations and in countering money laundering and terrorism.

See 31 U.S.C. 310(b)(2)(C)(v), (b)(2)(M)-(N); cf. Missouri, 595

U.S. at 93 (affirming vaccine mandate for healthcare workers

promulgated under the Secretary of Health and Human Services'

authority to pass regulation "necessary in the interest of the

health and safety of individuals who are furnished services").

Ultimately, and in the absence of facts suggesting

FinCEN tried to wield unheralded power, or regulate in an area

beyond its expertise, what Freeman's case seems to boil down to is

this: Congress, in amending Section 5330 in 2001, simply could

not have intended to regulate something that did not yet exist.

But there is nothing compelling about this timing-of-events

argument. Taken to its logical conclusion, Freeman's argument

more or less advocates for a principle of statutory construction

that exempts new technologies from existing statutory schemes

unless Congress had somehow foreseen the course of technological

innovation and had expressly accounted for it ahead of time. But

no such legal principle exists that we are aware of. Cf. Steele

- 50 - v. Comm'r of Soc. Sec., 51 F.4th 1059, 1060-61 (11th Cir. 2022)

(certifying questions related to whether a child conceived via in

vitro fertilization with cryo-preserved sperm after father's death

was entitled to benefits as father's child under the Social

Security Act and Florida law), certified question answered, 385

So. 3d 587 (Fla. 2024); Application of Sarkar, 588 F.2d 1330, 1333

(C.C.P.A. 1978) ("Congress cannot be expected to foresee, or to

annually amend [the Patent Act] to incorporate, every future

breakthrough onto entirely new technological terrain."). Courts

routinely enforce "plain statutory commands" even where Congress

may not have expected the statute to apply to certain factual

situations at the time of passage. See Bostock, 590 U.S. at 683.

The only case Freeman cites in support of his timing

theory is National Federation of Independent Business v. OSHA.

595 U.S. at 114-19. According to Freeman, the Supreme Court

rightly rejected the Occupational Health and Safety

Administration's ("OSHA") "attempt to impose a COVID vaccine

mandate based on a statutory provision adopted 50 years before the

pandemic," and, says Freeman, "[t]he same principles [should]

apply here." Yet nothing in the decision suggests that the Court

based its opinion on the fact that COVID-19 was a "new" virus that

did not exist when Congress enacted the Occupational Safety and

Health Act in 1970. See id. at 114. Instead, the Court's focus

was the unprecedented nature of OSHA's action in mandating

- 51 - universal vaccination and the apparent disconnect between such a

vaccine mandate and OSHA's actual sphere of expertise. Id. at 119

("OSHA, in its half century of existence, has never before adopted

a broad public health regulation of this kind —— addressing a

threat that is untethered, in any causal sense, from the

workplace."). Giving some credence to Freeman's assertion, the

reasoning in National Federation might resonate with us if, say,

FinCEN decided to regulate materials used to manufacture illegal

drugs on the basis that fewer illegal drug sales would reduce money

laundering. Freeman's view of National Federation's holding

appears to be an alternate reality in which OSHA had long exercised

statutory authority to issue vaccine mandates to address viral

spread, only for the Supreme Court to strike down its COVID-19

vaccine mandate on the basis that COVID-19 was a new type of virus

with an extraordinary and unforeseen impact on the United States.

That simply is not what National Federation is about, and there is

no coherent analogy between the unprecedented nature of OSHA's

regulatory assertion in that case and what happened here.

Put differently, under Freeman's characterization of

National Federation, the major questions doctrine would apply any

time an agency relied on a long extant statute to regulate an

impactful new technology. This would transform a legal doctrine

meant for extraordinary cases into a commonplace principle of

statutory interpretation. Because nothing in the history or

- 52 - breadth of FinCEN's regulation of money transmitting businesses

calls for application of the major questions doctrine, we turn now

to the political and economic significance of the regulation to

see if those considerations are difference-makers.

Political and Economic Significance

Political Significance

Freeman asserts that virtual currencies have "provoked

much political debate" (though he identifies no specific example

of it), and by this assertion seems to suggest that political

debate equates to political significance. As best we can tell, he

relies on his account of the legislative history of Section 5330

(which we've just explained only shows Congress's approval of

FinCEN's regulation of virtual currencies) rather than on any

meaningful or controversial legislative flashpoint that might call

into question Congress's intent to regulate virtual currencies.

To his nebulous "provoked much political debate" political

significance contention, Freeman, in his reply brief, adds a

federalism concern —— that FinCEN's regulation of virtual

currencies "intrudes into an area that is the particular domain of

state law." See Ala. Ass'n of Realtors, 594 U.S. at 764. We think

this after-thought argument is likely waived, given that he had

- 53 - every reason to make it in his opening brief.26 United States v.

Tosi, 897 F.3d 12, 15 (1st Cir. 2018) ("[A]rguments available at

the outset but raised for the first time in a reply brief need not

be considered."). Even if we were to give him the courtesy of the

doubt, his only support for this federalism proposition is a single

sentence from a Congressional Research Service report indicating

that "[m]oney transmitters are regulated and licensed at the state

level." See Andrew P. Scott, Cong. Rsch. Serv., R46486,

Telegraphs, Steamships, and Virtual Currency: An Analysis of Money

Transmitter Regulation 1 n.1 (2020). That federal and state anti-

money laundering regulatory regimes might co-exist hardly

demonstrates that the registration requirement is "significantly

alter[ing] the balance between federal and state power and the

power of the Government over private property" in the same manner

as an eviction moratorium. See Ala. Ass'n of Realtors, 594 U.S.

at 764 (reasoning that "the landlord-tenant relationship" is a

"particular domain of state law" upon which eviction moratorium

Freeman claims that this argument properly responds to the 26

government's assertion that he had not made any showing of an intrusion into the particular domain of state law and is thus a proper subject for a reply brief. See Wills v. Brown Univ., 184 F.3d 20, 27 (1st Cir. 1999) ("Reply briefs are to counter the appellee's arguments, not to offer new theories of error for the first time."). In our view, Freeman is not responding to a counterargument. He is belatedly raising an argument which the government pointed out he had neglected to include in his opening brief. See United States v. Mojica-Ramos, 103 F.4th 844, 849 n.3 (1st Cir. 2024).

- 54 - intrudes). Accordingly, we see no indication that when FinCEN

began regulating virtual currencies in 2013, it was acting on a

question of vast political significance.

Economic Significance

Freeman puts some more elbow grease into his argument

regarding economic significance, citing statistics to show the

growth in the bitcoin market in the last decade and a half.

According to Freemans's sources, the overall market capitalization

of bitcoin grew from less than $200,000 to approximately $1.2

trillion between July 2010 and May 2024, and virtual currencies

combined had a total market capitalization of approximately $2.22

trillion in July 2024. But Freeman's citation to the value of

bitcoin and other virtual currencies misunderstands the nature of

our inquiry in at least two ways. First, the major questions cases

direct our attention to, inter alia, the economic significance of

the agency's assertion of regulatory power, not just the size of

the industry being regulated. West Virginia, 597 U.S. at 721.

For instance, in applying the major questions doctrine to a

Department of Education attempt to cancel student debt, the Supreme

Court did not cite to the total amount of outstanding student loan

debt nationwide; instead it calculated the economic impact based

on an estimated total amount of debt to be cancelled by the agency.

Nebraska, 600 U.S. at 496, 502 (emphasizing cancellation of $430

billion in federal debt for 43 million Americans, presumably based

- 55 - on planned cancellation of $10,000 for each qualifying borrower).

Similarly, in cases holding that the Environmental Protection

Agency had exceeded its statutory authority, the Court's focus was

on the cost of compliance, not merely on the size of energy sector.

West Virginia, 597 U.S. at 714 (emphasizing that "EPA's own

modeling concluded that the rule would entail billions of dollars

in compliance costs"); Util. Air Regul. Grp., 573 U.S. at 321-22

(describing growth in administrative and permitting costs that

would result from the proposed rule).

As the district court recognized below (and the

government repeats on appeal), FinCEN has not banned all

transactions in virtual currency or attempted to regulate all users

of virtual currency (such as those who use virtual currency to

purchase other goods or services). See FIN-2013-G001, at 2

(explaining that a "user who obtains convertible virtual currency

and uses it to purchase real or virtual goods or services

is . . . not subject to FinCEN's registration, reporting, and

recordkeeping regulations."). Instead, it is simply requiring

businesses that transmit virtual currencies to register.27 Thus,

This opinion focuses on the registration requirement under 27

Section 5330 and does not address other aspects of compliance for money transmitting businesses, such as reporting. See FIN-2013-G001, at 2. This is because neither party has developed any argument about the other regulatory requirements, and so we have no information to go on. See Borrás-Borrero v. Corporación del Fondo del Seguro del Estado, 958 F.3d 26, 34 (1st Cir. 2020)

- 56 - the relevant question, in our view, is whether the cost of

complying with FinCEN's regulation is so high that we should

hesitate before assuming that FinCEN was permitted to enact such

a regulation. Freeman has made no attempt to demonstrate the cost

of compliance. By contrast, the government cites trial testimony

suggesting that registration is free and that other small

businesses that exchanged virtual currencies complied or planned

to comply with the registration requirement. Indeed Freeman's

breathless account of the rise of virtual currencies suggests that

FinCEN's regulation placed no meaningful economic burden on the

industry.

Second, it seems rather puzzling for Freeman to argue to

us that FinCEN undertook an extraordinary expansion of its

regulatory authority in 2013, by citing to the market

capitalization of bitcoin and other virtual currencies eleven

years later in May and July of 2024. To illustrate the problem

with Freeman's approach, we look to the motion to dismiss papers

(joined by Freeman), which asserted that the relevant data point

was the overall market capitalization of "non-state issued digital

assets" in November 2021, estimated to be $3 trillion. Apparently,

in less than three years, the market capitalization of virtual

(explaining that "we are generally reluctant to venture beyond the ambit of the parties' arguments to decide an issue without full briefing").

- 57 - currencies fell by roughly $800 billion (which would be more than

a quarter of the 2021 value). By relying on this data, does

Freeman intend to assert that a legal defense positing that

regulation of virtual currencies is a major question would have

been more likely to succeed in November 2021 than in July 2024?

Clearly it would be absurd to hold that FinCEN's regulatory

authority waxes and wanes with the price of volatile assets like

bitcoin. In our view, the relevant inquiry is whether regulation

of virtual currencies was a matter of vast political and economic

significance at or around the time FinCEN purportedly decided to

exercise its authority (back in 2011 and 2013). See West Virginia,

597 U.S. at 714 (noting an estimate of compliance costs that would

total billions of dollars from a 2015 regulatory impact analysis

as support for the economic significance of a 2015 rule); Ala.

Ass'n of Realtors, 594 U.S. at 764 (treating "nearly $50 billion

in emergency rental assistance" passed in January 2021 as "a

reasonable proxy" of the economic impact of eviction moratorium

imposed in 2020 and extended into 2021 (citing Temporary Halt in

Residential Evictions in Communities With Substantial or High

Transmission of COVID-19 To Prevent the Further Spread of COVID-19,

86 Fed. Reg. 43244, 43247 (Aug. 6, 2021))). According to the

motion to dismiss papers, the market capitalization of bitcoin was

only $1.17 billion in May 2013, as opposed to the $1.2 trillion

figure from May 2024 that Freeman would like us to focus on. The

- 58 - fact that the relevant industry grows substantially while subject

to a regulatory scheme does not heighten the economic significance

of the regulatory assertion. If anything, greater growth would

seem to suggest a financial marketplace unhampered by FinCEN's

regulatory scheme.

* * *

Summing up, Freeman's appeal is chock-full of major-

questions rhetoric, but under scrutiny, it bears little

resemblance to the line of extraordinary cases the Supreme Court

has held triggers the major questions doctrine. Requiring money

transmitting businesses that deal in virtual currency to register

is not a matter of such vast political and economic significance,

nor so broad as to be inconsistent with FinCEN's history, that we

should "hesitate" to interpret Section 5330 consistent with the

existence of such regulation. West Virginia, 597 U.S. at 721

(citation omitted). Because there is no major question, we need

not reach the question of whether Congress spoke with sufficient

clarity to permit FinCEN's to registration requirement for money

transmitters dealing in virtual currencies.28 We thus affirm the

district court's ruling on the motion to dismiss the indictment.

28That said, we have difficulty imagining how Congress could have spoken more clearly under these circumstances, where (1) the plain meaning of "funds" includes virtual currency; (2) the effective statute also explicitly refers to "an informal money transfer system" and "the transfer of money . . . outside of the

- 59 - Sufficiency of Tax Evasion Evidence

We turn now to Freeman's claim that the government

presented insufficient evidence of tax evasion to support his

conviction. Because Freeman preserved this argument below, we

conduct de novo review of the district court's denial of his motion

for judgment of acquittal. See United States v. Soler-Montalvo,

44 F.4th 1, 7 (1st Cir. 2022). To resolve a sufficiency challenge,

we examine "the evidence, both direct and circumstantial, in the

light most favorable to the prosecution," and will uphold the

conviction if "in this light, any reasonable jury could find all

the elements of the crime beyond a reasonable doubt." United

States v. Azubike, 564 F.3d 59, 64 (1st Cir. 2009) (citations

omitted). In other words, we do not need to conclude that "the

government succeeded in eliminating every possible theory

consistent with the defendant's innocence," only that "the guilty

verdict finds support in a plausible rendition of the record."

Soler-Montalvo, 44 F.4th at 7 (quoting United States v. Seary-

Colón, 997 F.3d 1, 11, 14 (1st Cir. 2021)). To sustain a tax

evasion conviction, the government had to prove three elements:

conventional financial institutions system," USA PATRIOT Act § 359(b), 115 Stat. at 328; (3) the legislative history of the effective definition supports application of the statute to emerging technologies for the transfer of value outside of traditional banks; and (4) Congress was aware of and subsequently codified the agency's interpretation. See Hornof, 107 F.4th at 59 n.28 (dismissing major questions argument in a footnote on the basis that "the statute speaks clearly").

- 60 - "(1) the existence of a tax deficiency, (2) an affirmative act

constituting an evasion or attempted evasion of the tax, and (3)

willfulness." United States v. Lavoie, 433 F.3d 95, 97 (1st Cir.

2005). Freeman claims that the government failed to carry its

burden on the first and third elements.

The government can prove a tax deficiency exists by

showing that the defendant did not file a tax return and had a tax

liability pursuant to the tax code. See United States v. Hogan,

861 F.2d 312, 315 (1st Cir. 1988) (citing United States v. Dack,

747 F.2d 1172, 1174 (7th Cir. 1984)). To make its case here, the

government called a revenue agent of the Internal Revenue Service

("IRS"), Colleen Ranahan, to testify. Ranahan testified that

Freeman had not filed tax returns for the years 2016, 2017, 2018,

and 2019. Ranahan also testified that Freeman owed taxes on income

he received from localbitcoins.com from those four years. To

determine tax liability, she calculated his total annual profit

from trades made on localbitcoins.com, using information gleaned

from Freeman's advertisements and trade history. She also

identified certain deductions that would have reduced Freeman's

tax liability, including a self-employment tax adjustment, a

qualified business income deduction, and the standard deduction

and personal exemptions applicable to every taxpayer. Based on

those deductions and the total profit, Ranahan calculated the

amount that Freeman would have owed in taxes for that income:

- 61 - $19,182.65 in 2016, $66,033.55 in 2017, $56,174.21 in 2018, and

$140,198.28 in 2019. This was sufficient evidence to show that

Freeman had a tax deficiency from 2016-2019. See Hogan, 861 F.2d

at 315-16; United States v. Russell, 998 F.2d 1001 (1st Cir. 1993)

(unpublished table decision) (affirming conviction based on

failure to file tax return and rejecting argument that no liability

existed because IRS could not make a valid assessment without a

tax return).

Freeman does not dispute Ranahan's method for

determining his profits from localbitcoins.com or the accuracy of

her calculations. Freeman primarily argues that Ranahan did not

have a complete view of his finances from 2016 through 2019 and

admitted on the witness stand that he might well have no

liability.29 To get our bearings, we start with one aspect of

Ranahan's testimony. On cross-examination, Ranahan admitted that

her calculation of Freeman's tax liability was based on a standard

deduction instead of itemized deductions for "things like

overhead," "property tax," and "charitable giving." She further

agreed that "if [Freeman] went through an itemization . . . he may

29 Freeman also emphasizes that the IRS never sent him an audit letter explaining that he owed taxes, but whether the IRS conducted a formal assessment of Freeman's liability and forewarned him is irrelevant to whether he actually owed those taxes. See Hogan, 861 F.2d at 315-16 (rejecting insufficiency challenge based on lack of "proper assessment of the tax due and owing").

- 62 - owe nothing." Read in context, Ranahan agreed to the hypothetical

possibility that if Freeman had submitted a tax return with

itemized deductions, those deductions could have reduced his tax

liability to zero.

But the government was not required to disprove every

hypothetical version of events in which Freeman was innocent. See

Soler-Montalvo, 44 F.4th at 7. Although the government bore the

ultimate burden of persuasion to show that a tax was due and owing,

the rule "uniformly applied in tax evasion cases" is "that evidence

of unexplained receipts," that is, a tax liability, "shifts to the

taxpayer" (here, Freeman) "the burden of coming forward with

evidence as to the amount of offsetting expenses." Siravo v.

United States, 377 F.2d 469, 473 (1st Cir. 1967); see also United

States v. Stayback, 212 F.2d 313, 317 (3d Cir. 1954); United States

v. Hiett, 581 F.2d 1199, 1202 (5th Cir. 1978); Elwert v. United

States, 231 F.2d 928, 933 (9th Cir. 1956). Here, the government

identified unreported income from localbitcoins.com and applied

deductions based on the available information, which shifted to

Freeman the burden of producing evidence rebutting Ranahan's tax

calculation. Siravo, 377 F.2d at 472. Freeman never did. He is

not entitled to attack the government's case on appeal with

hypothetical facts which might have exonerated him. See United

States v. Davenport, 824 F.2d 1511, 1516–17 (7th Cir. 1987) ("It

is neither necessary nor reasonably practicable to require the

- 63 - government to prove that there are no other conceivable deductions

of any sort to which the defendant might be entitled in the absence

of some indication that they may in fact exist."); Clark v. United

States, 211 F.2d 100, 103 (8th Cir. 1954) (explaining that

government need not "prove the non-existence of any other

deductions than those which the taxpayer has claimed in his return"

to establish prima facie tax evasion case).

Another problem for Freeman is that taxpayers are not

automatically entitled to itemized deductions. Instead, under the

tax code, "no itemized deduction shall be allowed" unless the

taxpayer "makes an election" on his or her tax return. 26 U.S.C.

§ 63(e)(1)-(2). Thus, even if Freeman had presented evidence of

a factual basis for claiming itemized deductions, he was not

entitled to those deductions under the tax code, because he never

filed a tax return, much less elected to itemize deductions. See

George v. Comm'r of Internal Revenue, 821 F. App'x 76, 77 (3d Cir.

2020) (concluding that taxpayer's "arguments regarding itemized

deductions are meritless" because "the Internal Revenue Code's

statutory language makes clear that, absent a filed return that

makes the appropriate election, a taxpayer is not entitled to

itemize"). Thus, the fact that Ranahan could not eliminate the

possibility that Freeman would have been entitled to an itemized

deduction is not a thing which renders the evidence insufficient.

- 64 - As to willfulness, the government must prove that

Freeman voluntarily and intentionally violated a known legal duty

to pay taxes on his income. United States v. Stierhoff, 549 F.3d

19, 26 (1st Cir. 2008) (quoting Cheek v. United States, 498 U.S.

192, 201 (1991)). Willfulness "may be inferred from 'any conduct,

the likely effect of which would be to mislead or to conceal.'"

Id. (quoting Spies v. United States, 317 U.S. 492, 499 (1943))

(identifying defendant's "employment of aliases and nominee

entities when conducting business," "pervasive use of non-

interest-bearing accounts (which do not trigger mechanical

reporting of income earned)," and regular use of cash or

"untraceable money orders" even though "checks normally would be

used" as facts supporting inference of willfulness (citations

omitted)); see United States v. Zanghi, 189 F.3d 71, 81 (1st Cir.

1999) (holding that "[c]onsistent patterns of understatement

coupled with conduct tending to conceal" was sufficient to sustain

willful tax evasion conviction). Such conduct includes a

defendant's "persistent failure to file income tax returns over

several years," especially where the defendant "earn[ed]

substantial income" during those years. Stierhoff, 549 F.3d at

26-27 (first citing United States v. Greenlee, 517 F.2d 899, 903

(3d Cir. 1975); and then citing United States v. Bohrer, 807 F.2d

159, 162 (10th Cir. 1986)). Freeman is correct, of course, that

"ignorance of the law is a defense in tax evasion cases" and a

- 65 - defendant who "possessed a good-faith, subjective belief that he

did not owe taxes on the income in question" is innocent. United

States v. McGill, 953 F.2d 10, 12 (1st Cir. 1992). Even so, the

government may prove its case by showing willful blindness, that

is a showing that the defendant "recogniz[ed] the likelihood of

wrongdoing," but "nonetheless consciously refuse[d] to take basic

investigatory steps." United States v. Anthony, 545 F.3d 60, 64,

65 (1st Cir. 2008) (citation omitted). This is because "deliberate

ignorance of a duty to pay taxes is contrary to a good-faith

belief." Id. at 65 (emphasis added).30

We think the government presented sufficient evidence of

concealment to permit a jury to infer that Freeman acted willfully.

For a period of four years, Freeman earned a substantial amount of

income and never reported that income or filed a tax return on it.

He accepted large cash transactions by mail. And when customers

sent him money through bank wires, he instructed them to lie to

their banks about the purpose of their purchase, often telling

30Our analysis that follows does not draw a fine line between evidence relevant to "willfulness" and evidence relevant to "willful blindness," as some of the government's evidence supports both theories. See Azubike, 564 F.3d at 67 (explaining that evidence need not "be placed in either an actual knowledge or a deliberate ignorance category" (quoting United States v. Griffin, 524 F.3d 71, 79 (1st Cir. 2008))). Freeman does not challenge the appropriateness of the willful blindness instruction, only the sufficiency of the evidence, so whether there was "separate and distinct" evidence of willful blindness is not an issue in this case. Id.

- 66 - them to call it a "church donation." During trial, the jury also

heard that Freeman was conducting business through multiple

churches: Shire Free Church, the Church of the Invisible Hand, the

New Hampshire Peace Church, and the Crypto Church of New Hampshire.

And there was evidence that at least some of these churches were

organized simply as nominal entities for Freeman to invoke at his

convenience.31

The government also offered evidence suggesting that

Freeman had a political or philosophical objection to paying taxes.

Such an objection, however sincerely held, does not negate

willfulness. United States v. Bonneau, 970 F.2d 929, 932 (1st

Cir. 1992) (citing Cheek, 498 U.S. at 205). Freeman displayed a

sign on his front porch that read "Stop paying taxes." In a text

message to an acquaintance, Freeman wrote "[o]nly suckers pay tax

on crypto" and complained that he never "opted in" to the

For instance, one of Freeman's friends signed the formation 31

documents of the Crypto Church of New Hampshire as a director or trustee. At trial, the friend testified that apart from signing the formation documents, he had no other participation in the activities of the church and did not know what its religious principles were. Another acquaintance testified that Freeman would discuss his church "[w]hen he needed it as a legal entity for some legal reason." Freeman reportedly asked that same acquaintance to prepare an accountant certification letter to send to a cryptocurrency exchange because he was "in the unusual position of not legally owning things but having the ability to control well over 2.5M in various assets." The acquaintance, who was not a certified accountant, prepared a letter stating that Freeman held "$2.4 million in various liquid assets" without reference to a church.

- 67 - "obligation to pay taxes." A rational reading of this statement

is that Freeman was aware that there might be a general obligation

to pay taxes on the sale of virtual currencies, but deliberately

blinded himself as to whether that obligation applied to him.

Combined with the evidence of concealment, the jury had sufficient

evidence of both willfulness and willful blindness to convict

Freeman of tax evasion.

Of course, that is not to say that the government's

evidence left him no room to argue his innocence. As Freeman

points out, there is no evidence that he received any letter or

notification from the IRS regarding taxes owed. But the absence

of certain types of evidence (such as notification letters) does

not make the evidence insufficient. While the jury may infer

willfulness from the presence of such evidence, "it is by no means

a necessary part of the needed mosaic of proof." Stierhoff, 549

F.3d at 26. Freeman also cites to his own testimony that he held

a sincere belief he had no tax liability because, according to his

own research, "churches under the IRS rules don't pay taxes."

Certainly, if the jury credited Freeman's testimony and determined

that he sincerely believed that he had no tax liability, it would

have been "duty bound to acquit." McGill, 953 F.2d at 12. But

the jury was also free to disbelieve this testimony, especially in

light of the evidence we've just described tending to show willful

opposition to the tax laws. See United States v. Nishnianidze,

- 68 - 342 F.3d 6, 14 (1st Cir. 2003) ("We are mindful that the jury's

duty is to assess credibility, and it may accept or reject, in

whole or in part, any testimony."). As an appellate court, our

role is simply to verify that the evidence, viewed in a light most

favorable to the guilty verdict, was sufficient to sustain all

elements of the offense. See Seary-Colón, 997 F.3d at 12. With

that in mind, we presume the jury discredited the testimony

supporting Freeman's good faith belief as it was permitted to do.

See United States v. Tierney, 266 F.3d 37, 40 (1st Cir. 2001)

(explaining that appellate court does not "second-guess" the

jury's credibility calls and "make[s] all credibility choices in

favor of the verdict"); see also Bonneau, 970 F.2d at 933

(acknowledging that defendant could believe both that wages were

not income under the tax code and that tax laws were

unconstitutional "at the same time," but affirming guilty verdict

where "the force and persistence of the defendant's views on the

constitutional issue certainly were evidence for the jury to

consider in deciding what he actually believed"); United States v.

Street, 370 F. App'x 343, 345 (3d Cir. 2010) ("The jury was free

to reject [defendant's] testimony that he was acting with a good

faith belief he was not required to file tax returns."). As laid

out above, the evidence of a tax deficiency and Freeman's

willfulness were sufficient to sustain a verdict. We thus affirm

Freeman's convictions for tax evasion.

- 69 - Spillover Prejudice

In a final attack on his convictions, Freeman asserts

that we should order a new trial because he was acquitted of the

money laundering charge by the district court after the trial.

His theory is that "the evidence admitted to prove [the money

laundering] charge as to which [he] was acquitted was so extensive,

inflammatory, and prejudicial that it necessarily spilled over

into the jury's consideration of his guilt on other charges."32

See United States v. Correia, 55 F.4th 12, 36 (1st Cir. 2022)

(citation and quotation marks omitted). In previous cases, we've

sometimes described this type of claim as "spillover prejudice" or

"evidentiary spillover." United States v. Abdelaziz, 68 F.4th 1,

60-61 (1st Cir. 2023). As the defendant, Freeman bears the burden

to "show 'prejudice so pervasive that a miscarriage of justice

looms'" if we do not remand for a new trial. Correia, 55 F.4th at

36-37 (quoting United States v. Simon, 12 F.4th 1, 43-44 (1st Cir.

2021)). We review the district court's denial of a new trial on

this basis for abuse of discretion. Id. at 36.

Freeman argues, as he did below in his motion for a new

trial, that "[t]he government relied heavily on the money

32 Freeman's brief asserts that his spillover prejudice argument would be "even stronger" if we vacated his other convictions for operation of an unlicensed money transmitting business and tax evasion. Because we do not vacate those convictions, we do not need to consider whether any evidence spilled over from those charges.

- 70 - laundering charge to paint Freeman as a person connected to the

sale of illegal drugs and to enhance his culpability for otherwise

regulatory offenses." In his appellate brief and his motion,

Freeman points to portions of the government's opening statement

and closing argument which referred to Freeman's interactions with

the undercover agent, and especially his awareness that the agent

purportedly was exchanging his drug proceeds for bitcoin. The

district court rejected his argument on the basis that any evidence

regarding Freeman's interactions with the undercover agent would

have been admissible to prove the allegation that Freeman conspired

to commit money laundering (a conviction which Freeman was not

acquitted of post-trial).33 Even though this was the basis for the

district court's decision and emphasized in the government's

appellate brief, Freeman has offered us no explanation as to what

evidence regarding the undercover agent would have been excluded

if the direct money laundering charge had been left out of the

trial. We agree with the district court that the undercover

agent's discussion of purported drug proceeds with Freeman was

relevant to establishing whether Freeman conspired with the

33 The district court granted Freeman's motion for judgment of acquittal only as to the direct money laundering conviction, on the basis that there was not sufficient evidence presented that Freeman knew that the undercover agent went to the bitcoin kiosk after Freeman told the agent that the kiosk was still there. The district court did not acquit Freeman of conspiracy to commit money laundering, a decision that Freeman has not challenged.

- 71 - undercover agent to perpetrate money laundering and thus could

have been admitted even if the underlying money laundering charge

had never been brought. See United States v. George, 761 F.3d 42,

48-49 (1st Cir. 2014) (concluding that sufficient evidence

supported conviction for conspiracy to commit money laundering in

part where that appellant had a conversation with his

co-conspirator regarding the "caper" in which co-conspirator

obtained ill-gotten gains); see also United States v. Tum, 707

F.3d 68, 74 (1st Cir. 2013) (explaining that to be liable for

conspiracy, a defendant must be a "willing participant" and know

the "essential nature" of the "collective endeavor"). Thus, we

affirm the district court's refusal to grant Freeman a new trial

for evidentiary spillover.34 See Correia, 55 F.4th at 37 (affirming

denial of motion for new trial where any retrial on the "still-

The cases in which we have granted a new trial for 34

evidentiary spillover tend to involve multiple defendants or multiple conspiracies. See, e.g., United States v. Weadick, 15 F.4th 1, 16 (1st Cir. 2021) ("Some amount of spillover is inherent in trying multiple defendants together."). In such cases, "one defendant allegedly may not be involved at all in one of the conspiracies, but may suffer from the evidence in support of the other defendants in those other conspiracies." United States v. Chan, 981 F.3d 39, 54-55 (1st Cir. 2020). Here, Freeman was tried alone and he makes no argument that confusion arose from the fact that he was charged with two conspiracies. Thus, this case lacks many of the factors that create a high risk of prejudicial spillover. Cf. United States v. Martínez, 994 F.3d 1, 15 (2021) (referring to risk that direct evidence of a co-defendant's corrupt intent and involvement in multiple schemes may have unfairly prejudiced appellant).

- 72 - standing convictions . . . would have involved much of the same

evidence" as the evidence in support of the dismissed counts).

Substantive Reasonableness of the Sentence

We turn now to Freeman's challenge to the substantive

reasonableness of his 96-month sentence, which represented a

substantial downward variance from the 210- to 262-month sentence

recommended by the United States Sentencing Guidelines. Freeman

is in for an "uphill" battle. See United States v. Dávila-Bonilla,

968 F.3d 1, 12 (1st Cir. 2020). We analyze Freeman's preserved

sentencing arguments "under the deferential abuse of discretion

standard, reviewing findings of fact for clear error and issues of

law de novo." United States v. Pupo, 995 F.3d 23, 29 (1st Cir.

2021) (citations omitted). And we must affirm the sentence so

long as the district court articulated a "plausible sentencing

rationale" and "reached a defensible result." Id. (quotation marks

omitted) (quoting United States v. Flores-Quiñones, 985 F.3d 128,

133 (1st Cir. 2021)). Under these standards, sentences falling

significantly below the guidelines range, as here, are "rarely"

disturbed for substantive unreasonableness. See, e.g., United

States v. Rivera-Gerena, 112 F.4th 67, 73 (1st Cir. 2024); United

States v. Millán-Machuca, 991 F.3d 7, 32 (1st Cir. 2021)).

None of Freeman's arguments convince us that this is one

of those rare cases. Freeman begins by listing several mitigating

factors, including his "minimal" criminal history, the lack of any

- 73 - evidence that he engaged in violent conduct, and his strong

community support. To the extent that Freeman is arguing that the

district court overlooked these factors, the record compels the

opposite conclusion. In imposing the sentence, the district court

explicitly referenced Freeman's "peace advocacy," "his lack of a

violent history, his many supporters, many of whom submitted

letters to the Court vouching for him and his character," and "his

lack of prior significant incarceration." The court believed that

these were among the factors that "make a variance below the

guideline sentencing range appropriate in this case." Against

this, the district court noted aggravating factors, some of which

were reflected in the guidelines range, including the enhancement

Freeman received as a "manager or leader" and the impact of the

crimes on his victims. It also noted that Freeman had a criminal

history but characterized it as "not substantial." Considering

all these circumstances, the court decided on "a very serious

sentence" of 96 months, which it emphasized was "less than half of

the low end of the guideline sentencing range" —— though more than

the 38 months Freeman asked for. Given the district court's

express attention to the factors identified by Freeman in his brief

to us, we readily conclude that the district court articulated a

plausible sentencing rationale. See United States v. Fuentes-

Moreno, 954 F.3d 383, 396-97 (1st Cir. 2020) (concluding that the

district court's consideration of the seriousness of the offenses

- 74 - and "recitation of [the defendant's] personal characteristics"

show that the sentence was "plausibly reasoned" (citation

omitted)). And we further conclude that this below-the-

guidelines-sentence was defensible, even if Freeman may wish that

the district court had given the mitigating factors more weight or

disregarded some of the aggravating factors. See Pupo, 995 F.3d

at 32 ("[W]e cannot assign error to a well-reasoned decision simply

because the district judge chose not to attach more weight to

certain mitigating factors."); Dávila-Bonilla, 968 F.3d at 12

(explaining that the district judge's failure to attach more weight

to mitigating factors does not render challenged sentence

implausible or indefensible); United States v. Montijo-Maysonet,

974 F.3d 34, 54-55 (1st Cir. 2020) (concluding that a 37-month

downward variance was substantively reasonable, despite

appellant's argument that the sentence was still too harsh); United

States v. Floyd, 740 F.3d 22, 39 (1st Cir. 2014) (describing

substantive reasonableness challenge to 84-month sentence which

varied from a 121- to 151- month guidelines range as "a pipe

dream").

Freeman also points to six other "virtual currency

related money laundering crimes" from around the country, in which

the defendants were sentenced to between four and 36 months. As

an initial matter, the government asserts that this sentencing

disparity argument was not preserved because Freeman only objected

- 75 - generally to the substantive reasonableness of this sentence

below. As a result, the government says Freeman forfeited the

argument and we must review this claim for plain error, a standard

that is even tougher on appellants than the abuse of discretion

standard advocated for by Freeman and which we've been relying on

thus far. United States v. Cruz-Ramos, 987 F.3d 27, 44 (1st Cir.

2021) ("[T]he hard-to-satisfy plain-error standard requires a

defendant to show error; plainness; an adverse effect on his

substantial rights; and a serious compromise of the fairness,

integrity, or reputation of the trial."). We need not expend ink

on this preservation dispute, however, because Freeman's disparity

argument fails even if we apply the more lenient, but still

deferential, abuse of discretion standard. See United States v.

Jiménez, 946 F.3d 8, 15 (1st Cir. 2019) (applying abuse of

discretion standard to avoid "somewhat blurred" issue regarding

standard of review for unpreserved substantive reasonableness

challenge (citation omitted)).

Freeman is right that 18 U.S.C. § 3553(a)(6) reflects a

goal of avoiding unwarranted "sentencing disparities among like

criminals who commit like crimes" across the nation. United States

v. Romero, 906 F.3d 196, 211 (1st Cir. 2018). However, a

sentencing disparity is not unwarranted "if material differences

between the defendant and the proposed comparator[s] suffice to

explain the divergence." Id. (alteration in original) (quoting

- 76 - United States v. Demers, 842 F.3d 8, 15 (1st Cir. 2016)); United

States v. Gonzalez, 981 F.3d 11, 23 (1st Cir. 2020) ("[W]hen a

defendant makes a claim of sentencing disparity, he 'must compare

apples to apples.'" (citation omitted)). Such differences can

include whether the defendant pled guilty or went to trial, details

from the defendant's personal or criminal histories, and

differences in the sentencing guidelines' advisory range. See,

e.g., United States v. De La Cruz, 91 F.4th 550, 552-53, 555 (1st

Cir. 2024) (rejecting claim of 45-month sentencing disparity

between co-defendants where co-defendant had "a much lower

advisory sentencing guideline range" and played a different role

in the offense); Gonzalez, 981 F.3d at 23 (rejecting disparity

claim where comparator committed one murder and pled guilty, but

appellant committed two murders and elected to stand trial).

Here, Freeman asks us to compare him to other defendants

sentenced for processing millions of dollars in virtual currency

and cherry picks the aspects of those cases most similar to his

own. Cf. United States v. Rosario, __ F.4th __, 2025 WL 1831040,

at *5 (1st Cir. July 3, 2025) (rejecting disparity claim where the

defendant did not provide "the necessary information to determine

whether" his proposed comparators were "identically situated,"

such as their criminal histories, "the specific circumstances of

their plea agreements," or "the particularities of their crime-

spree conduct"). But even with our limited insight into the

- 77 - details of these cases, we see several obvious differences. The

guidelines ranges calculated for each of these defendants were

apparently far lower than Freeman's 210-262 months.35 See De La

Cruz, 91 F.4th at 552-53. Half of these defendants were not

sentenced for any of the same charges faced by Freeman.36 See

United States v. Bishoff, 58 F.4th 18, 26 (1st Cir. 2023)

(rejecting sentencing disparity claim between co-defendants in

part because co-defendants were charged with different gun-related

offenses). None of the cited cases include tax evasion charges.

Setting that aside, five of the six defendants pled guilty rather

35 Transcript of Sentencing Hearing at 17:2-3, United States v. Randol, 23-cr-00440 (C.D. Cal. Jan. 17, 2024), ECF No. 56 (six to 12 months); Government Sentencing Memorandum at 2, United States v. Farace, No. 21-cr-00294 (D. Md. Dec. 15, 2023), ECF No. 92 (parties agreed to seek a sentence between 19 and 30 months based on consensus that guidelines range was 30 to 37 months); Government's Sentencing Memorandum at 3, United States v. Zhao, 23-cr-00179 (W.D. Wash. Nov. 21, 2023), ECF No. 78 (arguing for range of 12 to 18 months); Transcript of Sentencing Hearing at 5:8, United States v. Mejia, No. 21-cr-00008 (C.D. Cal. Nov. 18, 2021), ECF No. 44 (57 to 71 months); Defendant's Sentencing Memorandum at 2, United States v. Tetley, No. 17-cr-00738 (C.D. Cal. June 4, 2018), ECF No. 32 (uncontested range of 46 to 57 months); Defendant's Sentencing Memorandum at 27, United States v. Lebedev, No. 15-cr-00769 (S.D.N.Y. Aug. 29, 2017), ECF No. 585 (108 to 135 months as calculated by probation, 10 to 16 months as argued by defendant). 36Judgment at 1, Unites States v. Zhao, 23-cr-00179, ECF No. 90 (one count of failure to maintain an effective anti-money laundering program); Transcript of Sentencing Hearing at 26:2-5, Randol, 23-cr-00440, ECF No. 56 (same); Amended Judgment at 1-2, Lebedev, 15-cr-00769, ECF No. 748 (various bribery and fraud charges).

- 78 - than taking their case to trial.37 Most also had no prior

convictions, unlike Freeman.38 Finally, the district court in

Freeman's case noted that Freeman was receiving an upward

adjustment to his sentencing guidelines range based on his role as

a manager or leader. Freeman has cited nothing to suggest that

any of the defendants had a similarly culpable leadership role in

their own offenses. See United States v. Coplin-Benjamin, 79 F.4th

36, 44 (1st Cir. 2023) (holding that sentencing disparity was

warranted where appellant was found to be leader of conspiracy,

but co-defendants were "mere participant[s]"). Freeman has thus

not established that these comparators were similarly situated to

him such that a valid sentencing disparity claim exists. See,

e.g., United States v. Candelario, 105 F.4th 20, 24 (1st Cir. 2024)

(concluding that no unwarranted discrepancy between co-defendants

existed where difference in guidelines range was "critical datum

in a disparity analysis"); Jiménez, 946 F.3d at 15-16 (rejecting

appellant's claim that sentence "well below the guidelines range"

Plea Agreement, Zhao, 23-cr-00179, ECF No. 31; Transcript 37

of Sentencing Hearing at 26:22-23, Randol, 23-cr-00440, ECF No. 56 (noting acceptance of responsibility deduction from offense level); Plea Agreement, Farace, 21-cr-00294, ECF No. 79; Plea Agreement, Mejia, No. 21-cr-00008, ECF No. 5; Judgment at 1, Tetley, 17-cr-00738, ECF No. 45. Defendant's Sentencing Memorandum at 8, Zhao, 23-cr-00179, 38

ECF No. 82; Government's Sentencing Memorandum at 3, Farace, 21- cr-00294, ECF No. 92; Government's Sentencing Memorandum at 16, Tetley, 17-cr-00738, ECF No. 31; Defendant's Sentencing Memorandum at 32, Lebedev, 15-cr-0069, ECF No. 585.

- 79 - was unreasonable based on disparity with national average fraud

sentence where appellant "has not offered evidence that would show

that her circumstances are sufficiently similar to the national

median fraud defendant to create a meaningful point of

comparison").

In sum, Freeman has failed to show that his sentence was

substantively unreasonable, either based on the district court's

assessment of the Section 3553(a) sentencing factors or based on

any disparity with similarly situated defendants. Accordingly, we

affirm his sentence.

CONCLUSION

For the reasons stated, we affirm.

- 80 -