Business

Erik Gibbs

LocalBitcoins trader sentenced to 21 months in prison

Another LocalBitcoins cryptocurrency trader has found himself on the wrong side of US law enforcement. According to the US Attorney’s Office for the Southern District of California, Morgan Rockcoons has been sentenced to 21 months in federal prison for conduction operations on the site, including a real estate fraud scheme that involved Bitcoin Core (BTC).

The Las Vegas resident was accused of running an unlicensed money transmitting business, as well as wire fraud, in conjunction with his LocalBitcoins endeavors. In addition to his prison sentence, he will also have to turn over $80,600 that he earned illegally using the site.

Rockcoons was arrested October 29 of last year and pleaded guilty to his activities this past March. In addition, he admitted that he created a scheme to defraud potential investors through the sale of real estate in Nevada that he didn’t actually own.

That scheme saw the fraudster offering “Bitcointopia” to individuals at 0.5 Bitcoin Core (BTC) per acre. He billed it as a tax-free haven that would ultimately secede from the US. He was busted after receiving $14,000 from an undercover agent.

According to the government’s release on the sentencing, “Prior to his 2018 arrest, Rockcoons was indicted on November 8, 2017 for operating the unlicensed money transmitting business. He was arrested on that charge on February 9, 2018, and he was released on bond pending trial. In spring 2018, while on pretrial release, Rockcoons began promoting Bitcointopia on the internet and via social media.”

Rockcoons was apparently once one of the most prolific LocalBitcoins traders out of San Diego. In April 2016, reportedly had managed over 500 transactions and this doubled by October of the next year. He earned as much as 36% in commissions from each trade.

The entrepreneurial fraudster isn’t the first to be busted for running an unlicensed money transmitting business on LocalBitcoins, and probably won’t be the last. In October of last year, Jacob Burrell Campos was arrested for selling “hundreds of thousands of dollars” in BTC on the platform.

If anyone is considering using the platform, it might be a good idea to play by the rules. The US isn’t the only country that is monitoring the site and Finland has also stepped up, stating that it will start supervising the activity on the platform.

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