Las Vegas LocalBitcoins Trader Accused of Money Laundering
CEO of Bitcoin, Inc., Morgan Rockcoons was Detained by officials from U.S. Immigration and Customs Enforcement (ICE) at his home in Las Vegas, Nevada. He had been charged with operating an unlicensed money transmitting business and money laundering in line with the court records.
According to those records, in December 2017 Rockoons allegedly exchanged 10 Bitcoins (Worth $9,000) at that time for $14,500 in cash with an undercover law enforcement officer. The officer mentioned that the money came from the manufacture and sales of «Hash Oil» which is a banned substance in the United States.
Since Rockoons understood the cash was filthy and helped the law enforcement officer obtain bitcoins for this, he had been accused of laundering the money. Also, he was charged with running an unlicensed money transmitting business since the transaction was more than $10,000. Legitimate money transmitters are required to register with the Financial Crimes Enforcement Unit (FinCEN) by law if they're facilitating transmits over $10,000, and Rockoons was not registered.
A different side to the story
Rockoons, on the other hand, had an entirely different story in a series of tweets. He asserts the law enforcement officer said the money was for purchasing a medicinal hash machine and not that it was dirty money. Also, he claims the transaction was perfectly legal since the trade occurred in California and Cannabis is legal for both medicinal and recreational use in the nation.
Rockoons stated the buyer discovered him through LocalBitcoins, which is a peer-to-peer exchange for buyers and sellers to meet and transact Bitcoins. Then, the buyer insisted on paying him $14,500 for $9,000 worth Bitcoins to entrap him. So he received the money and sent Bitcoins worth less than $10,000 which he claims is still legal.
Rockoons insists that he never does any transaction above $10,000 and that he just did this one because he was in need of cash. He also claimed that the money was paid by cash in an envelope and the person had only contacted him through text messages.
Morgan Rockoons was locked up in jail for five days before he was released. He is fighting the charges in court and has taken to Twitter to inquire donations for his legal fees, which he expects to be around $150,000 — $300,000. He has been trying to appeal to the community, by calling his case an attack on Bitcoin. He's already received some donation, and he intends to pay his lawyers in Bitcoin.
Some people feel he should have known something was wrong here when someone offered to pay him $14,500 for Bitcoins worth just $9,000.
This is not the first time a US law-enforcement agency has attempted to entrap LocalBitcoin sellers. In actuality, in October last year, a Michigan man was detained for selling Bitcoins worth over $56,000 to law enforcement agents.