Bitcoin Doctor Jailed for Selling – Bitcoin Magazine

In 2011, journalist and tech entrepreneur Mark Hopkins shared a dinner with a longtime friend who offered to pay for his half of the meal by sending Hopkins newly minted bitcoin, which the friend had himself mined on his computer. portable. In a recent phone interview with Bitcoin Magazine, Hopkins joked that he had never heard of the world’s first peer-to-peer cryptocurrency before, but “being a good nerd myself” he had his laptop with him and downloaded the materials needed to accept the offer (about half a bitcoin to cover a meal in a cafe – “13 or 14 dollars” magic internet money – if you were wondering ).

This transaction began a years-long journey down the Bitcoin rabbit hole for Hopkins, launching an “OG” path that included adopting the online teaching persona of Doctor Bitcoin, becoming Vice President of Geosyn Mining (based in Fort Worth, Texas) and selling his personally mined bitcoin for many years to interested parties, either in person for cash or through totally over the edge bank transfers.

Hopkins said his interest in selling bitcoins was “mainly to meet people” for networking purposes, and he rarely cared about making a profit except on the biggest deals, but was focused. rather about turning wealthy buyers into long-term customers for his marketing company.

Hopkins noted that at the time there were “no federal guidelines” regarding bitcoin sales, so he regularly sought advice from Texas lawmakers, who assured him (and issued 2017 memorandum 1037 stating ) that they would not require licensing or regulation. the sale of bitcoin in the state. In fact, they encouraged Hopkins and others to “bring innovation to Texas,” Hopkins said.

However, on September 5, Hopkins announcement via his Twitter account that he would report to the Beaumont Federal Correctional Institute “for the crime of selling #Bitcoin a few years ago.”

“A kingpin in a lottery scam”

The arrest raised questions about the crime Hopkins had committed, particularly whether he had obtained assurances from Texas lawmakers that he was acting within the law.

In 2019, the Financial Crimes Enforcement Network (FinCEN), a federal office of the United States Department of the Treasury, issued 18 USC 1960, which requires the now well-known “money transfer license” to be obtained by those wishing to sell bitcoin and other cryptocurrencies to the public, with a suggested penalty of up to five years in prison for selling bitcoin without obtaining the license. It’s the crime Hopkins said he’s currently serving time for, but selling bitcoin isn’t the activity that initially caught the attention of federal law enforcement.

Hopkins reports that a former client of his was under observation for alleged participation in a Nigerian lottery scam. The buyer initially told Hopkins that she was buying bitcoin “for her husband’s electronics repair business” (he believed her at the time), although she later told investigators that she herself was “catfished by a Nigerian”, according to Hopkins.

Charitably described by Hopkins as “an unsuspecting user”, he not only sold bitcoin to this client about 20 times, but he also patiently helped and educated her on safekeeping best practices, as well as how to not “trigger” banking problems by using specific conditions that could lead to the closure of one’s bank account (which is quite a common phenomenon and a known concern among Bitcoin enthusiasts, especially at this time). According to Hopkins, prosecutors later insidiously accused him of teaching this woman “how to commit bank fraud.”

Suspected that Hopkins is somehow “the kingpin of a lottery scam” due to the sums of money “coming to him”, Hopkins’ family home was raided by “15 agents armed, who brandished firearms and search warrants…” and who confiscated more than $60,000 of his personal property, Hopkins said.

Cooperative and “fully transparent” during the raid, Hopkins said he informed federal agents of his public Doctor Bitcoin and professional LinkedIn profile, and shared details of his past consulting work with several US government agencies. (including the Federal Reserve) on bitcoin and blockchain technology. Hopkins claimed that he even explained in person to raid agents some of the best practices for using bitcoin wallets (e.g. automatically generating new random addresses with each new use), finding himself quite surprised that raid agents this white collar criminal division were not already well versed in such technology.

Based on his credentials and the nature of his work (and in particular his alleged innocence of the lottery scam currently under investigation), Hopkins was certain that these agents would soon realize that they “definitely had the wrong guy” and would even apologize. .

However, Hopkins now says that “what probably happened” is that “they spent so many resources to deploy 15 officers to a guy to solve a major crime and they stood empty, they so had to find something I was guilty of” to avoid the eggs in their faces, and that his named crime became “operating an unlicensed money transfer business, based on vague guidelines given by FinCEN… about a year earlier.”

As the case progressed, Hopkins said “they decided not to come right after me, but my wife because she was in my bank account” threatening them both “not only with the offense money transfer” but for banking advice given to his client, which could result in 35 years in prison for Mr and Mrs Hopkins.

“The government is fighting it hand, tooth and nail”

Hopkins now believes officers are guilty of ‘prosecuting misconduct or extortion, depending on how you want to look at it’ for offering to let his wife and three children out of the proceedings if he agreed to plead. guilty of selling bitcoin without the required money. transmitter license. But he added that, despite defending what is right or wrong, “I can’t leave my family (or) take a bet like that; my family comes first, whatever my principles. And so he accepted the plea deal.

Following his sentencing, Hopkins uses his Twitter account and media interviews to warn others about “the pervasive state war on privacy and the general failure of the criminal justice system.”

“I mean start with Ross (Ulbricht); start with (Julian) Assange; start with (Edward) Snowden. Watch what’s happening with developer Tornado Cash (Alexey Pertsev), the delisting of Monero from various exchanges (and) all attempts to improve privacy – and not just in cryptocurrency – but crypto in general over the past few years. last 20 to 30 years. The government is fighting it tooth and nail. It’s getting old, frankly, because people like us… get caught in the crossfire.

Calling for the “separation of money and state,” Hopkins warned that because the Bitcoin blockchain is a permanent record, more government forces (including the newly staffed Internal Revenue Service) will come for much more. of Bitcoiners based on old transaction history if they do not contact their legislators and “keep their feet on fire” to protect existing First Amendment principles and privacy laws. He warned that 18 USC 1960 (the licensing requirement for money transmitters) is an “existential threat…It’s there every time someone makes peer-to-peer transactions…like buying a truck with cash.” bitcoin, or if I share dinner with you and you pay your half with bitcoin, you are committing a federal crime.

“You can see very clearly that there is a slight increase” in the prosecution of cryptocurrency crimes 18 USC 1960, he said. And the targeting of those to be charged or prosecuted “moves away from major crimes. The Department of Justice,” Hopkins argued, holds “clinics on how to enforce the law more liberally.”

In addition to bringing his own case to light, Hopkins is now actively involved with FreeRossDAO (working to free Ulbricht, who founded the first darknet Bitcoin market Silk Road, from prison). Hopkins said Ulbricht is “a martyr,” whose legal status far exceeds his own, saying, “I sold bitcoin, I used the money in ways the government didn’t like. not. My life sucks today but… it’ll be better in a year. But Ross will still be in jail.

“If we … don’t demand that our government change this law and its application, over time they can come after each and every one of us,” Hopkins added.

Hopkins’ son will maintain his father’s Twitter account while Hopkins serves his sentence.

This is a guest post by Guy Malone. The opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.