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Thu May 30, 2019, 03:55 AM

Cryptocurrency exchanger at center of 'Bitcointopia' fraud sentenced to nearly 2 years in prison

SAN DIEGO ó A cryptocurrency entrepreneur who dreamed up Bitcointopia, a city of the future in the Nevada desert, then sold plots of land he didnít own to unsuspecting investors, was sentenced in San Diego federal court Tuesday to 21 months in prison.

Morgan Rockcoons, 31, first came to the attention of federal investigators in 2015 as San Diegoís most prolific bitcoin trader and seller. An undercover agent with U.S. Homeland Security Investigations posing as a butane hash oil manufacturer contacted Rockcoons through LocalBitcoin.com to make a transaction.

As a bitcoin exchanger, Rockcoons was supposed to follow the same set of rules as money transmitters, including registering with the Financial Crimes Enforcement Network, knowing the identity of customers and reporting transactions over $10,000 to the government. The rules are meant to combat money laundering.

But Rockcoons agreed to conduct the transaction anonymously, knowing the funds would be used for a marijuana business, and accepted the undercover agentís lump payment of $14,500 without reporting to the government, prosecutors said. The 2017 transfer consisted of 9.998 bitcoins with a value of just over $9,200, with Rockcoons taking the remaining $5,200 as a transaction fee.

Read more: https://www.sandiegouniontribune.com/news/courts/story/2019-05-29/cryptocurrency-exchanger-at-center-of-bitcointopia-fraud-sentenced-to-nearly-2-years-in-prison

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