Arrested by Homeland Security!
On February 9th, 2018, Morgan Rockwell was arrested in his own home for a Bitcoin transaction dating back to late 2016.
The reason for the arrest was selling Bitcoin for cash, and although he is currently released under a personal recognizance bond, Morgan is being charged under section 18 USC 1956 – Money Laundering Instrument.
Morgan’s court appearance will be on February 22nd, 2018 at the Edgar J. Schwartz building in San Diego.
Due to the charges given, Morgan faces legal fees of over $150,000, with accusations of money laundering. This is not the first time an individual has been targeted for using digital assets and flagged as breaching anti-money laundering requirements.
Are users of cryptocurrency going to be forced to submit transactional data if they used third-party exchanges, such as Coinbase?
If this is a requirement for many users of cryptocurrency who have already exchanged their digital assets for government-issued cash, we may see a wave of arrests as 2018 unfolds in an attempt to clamp down on everyday people and start-ups that are creating wealth that does not require dependency on Big Brother…
According to www.fincen.gov, some form of data may need to be submitted to authorities, but as cryptocurrencies are not restricted by borders and are ultimately nationless, the confusion regarding them intensifies.
“Certain money services businesses (MSBs) have been required to register with FinCEN since 1999, when the MSB regulations first went into effect. An entity acting as an MSB that fails to register as required is subject to civil money penalties and possible criminal prosecution. The registration of the MSB serves as a first step in establishing the compliance framework for applicable FinCEN regulations designed to help mitigate the risks of criminal abuse of MSBs for money laundering and terrorist financing as the MSB seeks to provide financial services to customers for legitimate purposes. There is no cost for registration, which is a simple procedure explained in detail on FinCEN’s Web site at https://www.fincen.gov/money-services-business-msb-registration.”
Source: https://www.fincen.gov/enforcement-actions-failure-register-money-services-business
The Danger of BitLicence
As cryptocurrencies are taken seriously by financial powers, we’ve seen the emergence of the BitLicence.
Issued by the New York State Department of Financial Services, the licence is a requirement for cryptocurrency-based businesses that brings similar regulatory rules to those of brokerage firms as a blatant attempt to control the innovative growth of the emerging blockchain sector.
Bitcoin is for the People – Not the Government
Bitcoin was developed to be an open source network, without the need for any third parties to regulate or manipulate operations within. If this new licence spreads to other states or other nations adopt similar laws, it could drive out start-ups from the respective countries and push innovation to locations where the laws are not so harsh.
This is ultimately something every user of cryptocurrency should take heed of, regardless of which country they reside in.
As Bitcoin and the blockchain industry in general continue to grow, authorities will begin to take more action, possibly enforcing the new BitLicence. Please research and consider the legal implications when investing in cryptocurrencies – it is not worth going to court or prison over.
Trusting third-party exchanges may not be the best idea, as they are the first in line for regulatory crackdowns (due to being a crossroads for cryptocurrencies and fiat currencies). If prompted, they can give up your transactional data without your consent.
We will keep you posted on Morgan’s case as it progresses, and you can also follow him on Twitter.
Written by Luke Dodwell for CrushTheStreet.com 2018-02-18
- 2018-02-18
- @lukedaniel
Government just doing government stuff. Pandora's box already open, too late for them.
The sad part to me is that HOMELAND SECURITY is a national Police force! This has nothing to do with HOMELAND SECURITY!
Thanks GWB and all the cronies who voted for the Patriot act that brought us domestic surveillance, suspension of habeas corpus, and a whole raft of un Patriotic legislation that was used mostly for prosecuting domestic non-terrorist crimes.
Wow that is so fucked up.
This is what I call low quality FUD. Arizona just accepted crypto for tax payments...
THIS is disturbing news.
good post
wooww... low..? good information and disturb news... hehe
BTC is and other cryptos are being banned in some countries.
Wait, isn't that Trump's "wall"? Just like the French "Maginot line" to keep out the Germans whenever you build a wall people just go around, over, under, and sometimes straight through it. Yeah for sure someone will figure out the equivalent of quantum tunneling to get through walls. Eventually ICOs will raise enough money to launch their own constellations of satellites to give access to their blockchains (and maybe just host them in space, period.)
Nexus has done exactly that. They're launching satellites to provide internet access, and host a blockchain for their currency.
check it out!
Oh mehn, the government wont let us rest.
This kind of action was expected. It is not the first time.. and mr. Morgan (if convicted) wont be first person to go to prison.
As mentioned by someone on "SGTReport", someone warned BTC hodlers/traders that this will hapened.
Quote :
This should come as absolutely no surprise to anyone with foresight. Some have been warning of this sort of thing from day one. Chris Duane reminds people of this regularly, but the crypto-cultists drag him through the mud for relaying the unpleasant but honest message.
Cryptos will continue to be hijacked and ultimately controlled by the very entities who hastened their emergence in the first place from behind the veil. These entities had (and have) suckers the world over actually believing that cryptos were/are going to permanently make an end-run around government scrutiny. Now that they got everyone right where they want them, the claws are coming out.
Stick with nature's money in physical form. Thousands of years of monetary history give it its longevity and legitimacy. And the fact that it isn't a "get rich quick" scheme makes it all the more solid.
End quote
I think whoever wrote that should have a look at Bitcoin first before making a statement. The fact of the matter is that crypto currencies, such as Bitcoin, can be neither "hijacked" nor controlled by governments. And I'd be intrigued to know where this dumb theory comes from, that says that it was a government that "invented" Bitcoin. Why the hell would governments / banks want to invent a currency that they can't create out of thin air, that is not tied to an identity, and that they can't control? That makes as much sense to me as if someone told that General Motors and Exxon Mobile colluded in order to come up with a car that runs on rainwater in order to make people more dependent on gas engines and crude oil. In other words: If those people are so stupid, how come they are so wealthy?
Well, and even if they invented it - it can't be 'uninvented'. And wasn't it Kodak who invented the digital camera and then went bankrupt over their own invention?
Couple days ago, I heard something I am not sure, whether to belive.
Could you please help me.
In BTC, all things are decided by "majority of miners".
So... if majority of miners decide to "rise number of BTC", then (in theory) 21 mio is NOT "final max number of BTC" ????
Your thoughts ?
You're right:
Mathematics puts some limits that "majority of miners" cannot decide.
That's a negative on that question. The miners cannot decide anything by themselves, even if they all worked together. In Bitcoin we have five constituents, of which none has full control over the system: Developers, Miners, Nodes & Wallets, Users and Retailers. They all have their own interests which partially even contradict the interests of others. That's why it is called a 'consensus network'.
Even nation states wouldn't be able to take over or take down Bitcoin anymore, because the network has grown too strong by now. Here's a link to a video I transcribed, where Andreas Antonopoulos explains why Bitcoin is so resilient against attackers:
Can Governments take over BitCoin?
There are some who believe that the move toward th elightening network witrh btc is the "beginning of the end" see here: https://steemit.com/bitcoin/@son-of-satire/what-is-bitcoin-s-lightning-network-and-how-will-it-be-used-to-fuck-us
I'd like to add that I don't think there is any necessary connection between wealth and intelligence... there are some pretty dumb rich people, I'm sure... and a lot more "smart," poor ones. Then again, how one defines "intelligence" can be quite subjective... In some ways it seems plausible that gov did create btc... I'd suggest watching vdeo I posted above about lightning network. an makes argument that its implemenation will "fuck us," to use his terminology. I can't explain details atm, just watch vid :)
Hola soy nueva en esta gran comunidad, espero tener su apoyo, como dice el un dicho: El que se arriesga no pierde nada y el que NO se arriesga no gana... Éxito
This an amazing article @crushthestreet thanks so much for sharing this. I can feel your enthusiasm to help this platform grow. Because of people like you who has so much passion to share and create awareness the growth of steemit will be surely achieve. I do have tons of projects that I wanna bring in to steemit and this guide will definitely help me.
You are such an inspiration to everyone. Keep it up.
-.Thaly.-
The charge is for money laundering; not cryptocurrency trading. We'll know more when he gets his day in court.
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This is ridiculous..... Someone teach those stone aged people something...... And we were born free.... Why should theh 'arrest' people unnecessarily? This is insane.....
I'm not really surprised to hear this though. When I first started going to Bitcoin related meetups in 2013 (there was really only Bitcoin and a few crap-coins back then) there were always shady men (and women) showing up saying they had tens of thousands of dollars in their car and would like to buy somem Bitcoins with it. They were very clearly doing it to either launder money or for tax avoidance.
I do find it interesting that this guy was selling Bitcoin which seems like the lessor side of money laundering - but maybe they just went after him because they couldn't trace the buyer - who is probably hiding out in Crypto Utopia right now. Or maybe he was someone who was paid in Bitcoin for illicit goods or services and was using p2p transactions to cash out his illicit gains (tax free). Let's not forget that tax avoidance is an easy way for governments to get criminals when they can't get hard evidence on actual crimes.
So who know what the whole story is here but I really doubt he's just some innocent person who did a LocalBitcoins transaction for $100 because they were sick of waiting for Coinbase to approve their account and things went bad. Let's watch this space...
I think they are just trying to scare people by making few arrests. If they really crack down on Cryptos the war on drugs would end up looking like a success.
@crushthestreet - interesting post. I didn't know there were already people being arrested just for trading Bitcoin for cash. I would think that crypto trading would give people a little anonymity, but I was wrong. We will all have to be more careful with assets that are considered commodities. As we move to the future I am sure that more governments will seek to control cryptos. Upvoted!
ooh-ooh this is alarming :-(
Morgan got caught because he was greedy.... he sold bitcoin for cash to an undercover officer.... greed leads to high risk transactions. He gonna pay for his mistakes.
he was selling hash oil ffs !!!