To pawn or sell to a receiver of stolen goods. The kiddey fenced his thimble for three quids; the young fellow pawned his watch for three guineas. To fence invariably means to pawn or sell goods to a receiver.
Definition taken from The 1811 Dictionary of the Vulgar Tongue, originally by Francis Grose.
Fen * Fencing KenNathan Bailey's 1736 Dictionary of canting and thieving slang
John S. Farmer's collection of canting songs and slang rhymes