Bitcoin doesn't transfer funds or money, it only transfers btc, a "collectable" under the law. Is a baseball card dealer a "money transmitter"? No. Not even if they sell online, the same is true of gold, art, etc. As baseball cards are KYC free it is discriminatory to infringe on btc this way.

Perhaps an enterprising bitcoiner will start a KYC free bitcoin for gold exchange (since all transactions under $10,000 are non-reportable) to highlight the discrimination.

The only way the govt can claim btc is transferring funds/money is if they reclassify btc as a currency. Note: I'm way too smart to be a lawyer so you may want to forward this to whatever legal team will be fighting this as they are likely to overlook it.