Bitcoin educator Doctor Bitcoin explains his recent arrest in connection with selling BTC, and warns that the government will not stop at him.
Mark Hopkins, a journalist and tech entrepreneur, shared dinner with his long-time friend. Hopkins offered to pay Hopkins his portion by sending him some bitcoins that he had mined on his own laptop. Hopkins joked that he hadn't heard of Bitcoin Magazine's first peer to peer cryptocurrency, but that he was "a good nerd" and had downloaded the necessary hardware to accept the offer. Hopkins received about half a bitcoin to pay for a coffeehouse meal, which is "13 to 14 dollars' worth of magic internet currency — in case you were curious).
This transaction started Hopkins' long journey down the Bitcoin rabbit hole. He became vice president of Geosyn Mining, Fort Worth, Texas, and sold his personally-mined bitcoin to interested parties for years, either in cash or via bank wires.
Hopkins stated that his main interest in bitcoin sales was to "meet people" and to network. He said that he didn't care about making a profit on large deals but that he was more interested in turning high-net-worth clients into long-term customers for his marketing company.
Hopkins pointed out that there was no federal guidance regarding bitcoin sales at the time. He sought advice from Texas legislators, who assured Hopkins (and published Memorandum 1037 in 2017) that they would not require licenses nor regulate the sale of bitcoin within the state. Hopkins stated that they encouraged Hopkins and other people to "bring in innovation to Texas."
Hopkins, however, announced on Twitter that he would report to Beaumont Federal Correctional Institute for "the crime of selling #Bitcoin some years ago."
"A Kingpin in a Lottery Scam"
There were questions raised about Hopkins' crime, especially if he had received assurances from Texas legislators that he was following the law.
The Financial Crimes Enforcement Network (FinCEN), which is a federal bureau of the U.S. Department of the Treasury published 18 USC 60 in 2019. This requires that anyone who wants to sell bitcoin or other cryptocurrencies to the general public obtain the well-known "money transmitters license". There are suggested penalties of up to five year imprisonment for those who do not have the license. Hopkins is currently serving time for this crime, however selling bitcoin is not the original offense that caught federal law enforcement's attention.
Hopkins reported that Hopkins was monitoring a former client for possible participation in a Nigerian lottery fraud. Hopkins reports that the buyer initially told Hopkins she bought bitcoin for her husband's electronic repair company. Hopkins later confirmed that she told Hopkins she had been catfished by a Nigerian.
Hopkins described Hopkins as "an unsophisticated client" and said that he sold bitcoin to her on about 20 occasions. He also helped and educated her in best custody procedures, how to avoid "triggering" banking problems, and how to not use terms that could cause her bank account to be closed. This is a common occurrence, and a concern for Bitcoin enthusiasts at the time. Hopkins claims that Hopkins was later falsely charged by the prosecution with teaching the woman how to commit bank fraud.
Hopkins claimed that Hopkins was "a kingpin" in a lottery fraud because of the large amounts of money flowing to him. Hopkins' family house was raided by "15 armed agents" who waved guns and search warrants and confiscated more than $60,000 of Hopkins' personal property.
Hopkins was cooperative and transparent during the raid. He shared details about his previous consulting work with several U.S. government agencies, including the Federal Reserve, on blockchain technology and bitcoin. Hopkins claimed Hopkins even gave the raiding agents a demonstration of best practices for bitcoin wallets, such as auto-generating random addresses with each new use. Hopkins was surprised that white-collar criminal agents were not familiar with such technology.
Hopkins believed that the agents would soon realize that they had the wrong man based on their credentials and the nature of Hopkins' work, and that he would even apologize.
Hopkins now says that Hopkins was wrong. He said that they spent so much time sending 15 agents to a man's home to solve a major criminal, but came up empty. To avoid any egg on their faces, they had to find something I was guilty of to cover the fact that Hopkins was "operating money transmitters' without a license" based on vague guidance from FinCEN "about a year ago."
Hopkins stated that Hopkins "not only came after me but also my wife" and threatened them "not with the money transmitter offense but for the bank-related advice he gave his client. This could lead to Mr. Hopkins and Mrs. Hopkins being sentenced to 35 years imprisonment.
"The Government Fights it Hand, Tooth and Nail"
Hopkins believes that the agents are guilty either of prosecutorial misconduct or extortion depending on how you look at it. He offered to let his three children and wife out of the proceedings if Hopkins pleaded guilty to selling bitcoins without the money transmitters' license. He said that despite his defense of right and wrong, Hopkins believes that the agents are guilty of "prosecutorial misconduct or extortion, depending on how you look at it" for offering to leave his family (or) take an agambit like that. His family is always first, regardless what my principles may be. So he accepted the plea agreement.
Hopkins has been using his Twitter account, as well as media interviews, to warn others about the "encroaching state warfare on privacy" and the overall brokenness of the criminal justice process.
"It is important to start with Ross Ulbricht; Julian Assange (Julian), Edward Snowden (Edward). Take a look at the current situation with Tornado Cash developer Alexey Pertsev, the delisting Monero from different exchanges (and) any attempt to improve privacy — not only in cryptography but in general the past 20-30 years. It is being fought tooth and nail by the government. It's getting old because people like you… get caught up in the crossfire."
Hopkins called for the "separation between money and the state" and warned that, because the Bitcoin blockchain is permanent, more government agencies (including the newly-staffed Internal Revenue Service), will be looking for Bitcoiners with old transaction histories if they don't contact their legislators to "hold their feet up to the fire" in order to protect privacy and First Amendment principles. 18 USC 1960, which regulates money transmitters, is a "possible threat." It's there whenever someone transacts peer to peer… like buying a truck with Bitcoin, or paying for half of your dinner with bitcoin.
"You can see very clearly there's an uptick" in prosecuting 18 USC 1960 cryptocurrency-related crimes, he said. The targeting of the people to prosecute or charge is moving away from major cases crimes. Hopkins stated that the Department of Justice holds "clinics" on how to apply law more liberally.
Hopkins has been active in FreeRossDAO, which is working to free Ulbricht (the founder of the early Bitcoin darknet marketplace Silk Road) from prison. Hopkins stated that Ulbricht was "a martyr" whose legal situation far exceeds his own. He said, "I sold some Bitcoin, I used money that the government didn't like." My life is terrible right now, but it will get better in one year. Ross will remain in prison.
Hopkins said Hopkins did not add that Hopkins would demand that the government change this law or its application. Hopkins agreed.
While Hopkins is serving his sentence, Hopkins' son will continue to manage his father's account on Twitter.
Guy Malone contributed this guest post. These opinions are completely theirs and do not necessarily reflect the views of BTC Inc. or Bitcoin Magazine.
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By: Guy Malone
Title: Doctor Bitcoin, Jailed For Selling P2P, Warns Others They’ll Be Next
Sourced From: bitcoinmagazine.com/culture/doctor-bitcoin-jailed-for-selling
Published Date: Wed, 07 Sep 2022 17:11:42 GMT
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