Well, in the US in general it might be. The police are saying that it is probably a crime under money laundering and unlicensed money transmitting laws. The issue is that particular set of laws are mostly outrageous and quite unintuitive in practice. They criminalise a lot of quite reasonable activity - in this case, like selling bitcoin for cash.
Although the thread root refutation makes no sense. Freely trading bitcoin leading to 9-11 is going to have to involve some flexible mental gymnastics since 9-11 happened in a pre-Bitcoin world. In practice AML style laws are generally targeting tax evasion.
Perhaps the police are trying to find a way to apply asset forfeiture because Bitcoin is so valuable? That would make more sense than AML because police forces don’t generally investigate those crimes — enforcement is usually the domain of FinCen and banks.
Although the thread root refutation makes no sense. Freely trading bitcoin leading to 9-11 is going to have to involve some flexible mental gymnastics since 9-11 happened in a pre-Bitcoin world. In practice AML style laws are generally targeting tax evasion.