Bitcoin Goes to Court
Bitcoin has taken the financial world by storm. The virtual-currency, at the same time, is rarely mentioned in the legal world. Few courts have considered its legal implications. More specifically, courts have provided little guidance on a basic issue – whether standard bank regulations apply to bitcoin. Lower courts have split on the issue. As a result, no legal precedent exists. How then are bitcoin transactions treated?
A San Diego case will shed light on the issue, according to the San Diego Union-Tribune. The case is based on a bungled bitcoin transaction. The defendant, Morgan Rockcoons, is the CEO of Bitcoin, Inc. He unwittingly arranged a bitcoin transaction with an undercover DHS agent. The agent told Rockcoons that he would use the bitcoin to help manufacture hash oil. Rockcoons nonetheless exchanged almost 10 coins for more than $14,000 in cash.
Prosecutors argue that Rockcoons was legally required to report the transaction under federal anti-money laundering laws. According to those laws, any transaction over $10,000 must be reported. Rockcoons never reported anything. He also failed to register with FinCen (the Financial Crimes Enforcement Network), as required by law.
Rockcoons was eventually indicted for money laundering and other crimes.
Since his indictment, Rockcoons has been a popular champion for bitcoin enthusiasts. He frequently tweets and re-tweets conspiracy theories about bitcoin. He argues he was unfairly targeted. According to Rockcoons, authorities want to choke-off the entire bitcoin world. He recently re-tweeted a Julian Assange post from The Intercept. That post was entitled “The NSA Worked to ‘Track Down’ Bitcoin Users.” Rockcoons also bragged about earning $4 million in 2017. At the same time, he admits to living in a tent in the woods. He is collecting legal-defense funds from followers
Rockcoons may be an imperfect defendant for such an important case. Bitcoin enthusiasts should be wary he represents their community.
We will continue to track this case until a verdict is rendered.
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