Morgan Rockcoons, also known as Morgan Rockwell, has pleaded guilty to two cryptocurrency-related charges in San Diego federal court this week. Rockcoons admitted both to selling land he didn’t have for a crypto city project dubbed “Bitcointopia” and to operating a money transmitting business without a license, daily news outlet the Los Angeles Times (LA Times) reported on March 8.
Per the report, Rockcoons first attracted the attention of law enforcement in 2015 with his Bitcoin (BTC)-fiat currency exchange services, which he advertised online. The LA Times reports that under United States federal law, businesses exchanging crypto for cash in the country must be licensed as money transmitters with the Financial Crimes Enforcement Network.
At the end of 2016, an undercover U.S. agent allegedly posed as a hash oil manufacturer who needed to pay for equipment in BTC. In his plea agreement, Rockcoons reportedly admitted that he transferred about $9,200 in Bitcoin to the agent for $14,500 in cash, keeping the surplus as a fee.
Per the report, during his bail period, Rockcoons launched his crypto city project Bitcointopia, an initiative described as “the desert crypto-kingdom of the future.” While the project’s website is evidently offline, an advertisement on what appears to be Bitcointopia’s official Twitter profile shows that the company was selling one acre of land in Nevada for 0.5 BTC (about $1,977 at press time), two acres for one BTC (about $3,956) and three acres for 1.5 BTC (about $5,934)
According to the LA Times, the land was located in Elko County, Nevada, but prosecutors said that Rockcoons in fact only owned under 5 acres in two non-contiguous plots. The report claims that he, however, advertised 500 to 1,000 acre plots and the loss to investors amounted at least to $45,600.
Rockcoons reportedly faces up to 20 years in prison over the fraud charge and up to 5 years because of operating an unregistered money transmission business in the U.S.
In June 2018, news broke that an Los Angeles-based trader, who acted under the pseudonym “Bitcoin Maven,” was prosecuted for similar charges, allegedly running an unregistered multi-million dollar Bitcoin-fiat money transmitting business, also via a LocalBitcoins.