Federal prison sentence Bitcoiner warns users involved in OTC trading
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Federal prison sentence Bitcoiner warns users involved in OTC trading
Mark Alexander Hopkins, also known by the monikerDoctor Bitcoin or his handle Reason, after announcing thesentence in his case to social media followers, claimed that"Bitcoin P2P transactions are a federal crime." In a SundayTwitter thread, Hopkins said he was facing between 6-15 months at a federalcorrectional institution in Texas after pleading guilty to operating a cryptobusiness without the required license.
According to Rizzn, the United States Financial CrimesEnforcement Network, or FinCEN, used a 2019 interpretation of a law — 18U.S.C.960 - Originally enacted in 1992 for accusing them of illegally running a"money transmitting business". “This means thatat any time crypto traders interact with P2P (i.e., not with an exchange), theyare legally liable under this statute as currently interpreted,” Rissonsaid. In practice, this is a catch-all law.
I was originally suspected of being the kingpin inthis particular scam, and while it was clear that I was not, they were easilyable to make a case that I had not federally registered before selling mybitcoins. Bitcoiners, who said they joined the space in 2011,claimed they were "one of hundreds of thousands of OTC traders"in 2019, among a bad actor involved in an illegal lottery scheme for bitcoin(BTC). were using the trading group to launder money with.Purchase.
Reason claimed to facilitate fiat-to-cryptoexchanges on behalf of the party – who indicated that they did not know theywere being investigated for the crime – resulting in the U.S. wastargeted by the authorities. According to Reason, they were “registeredsolely as a bitcoin seller with FinCEN” but the Justice Departmentstill targeted them based on their involvement in illegal transactions.
Acting US Attorney Prerak Shah said at the time thatHopkins "ignored federal law and allowed fraudsters to use bitcointo operate under the radar of law enforcement" and sought toverify the source of the funds involved in the transaction. - between $550,000and $1.5 million at the time. Reason has disputed several of the JusticeDepartment's claims that they performed Know Your Customer and anti-moneylaundering practices fairly.
Before entering the prison, the bitcoinerworked in the U.S. The U.S. called for regulatory clarity between the state andfederal levels, seemingly in an effort to ensure that other cryptousers do not face similar enforcement action. FinCEN made similar allegationsagainst a California resident in April 2019, alleging that he knowinglyviolated money transmission laws by acting as a P2P exchanger for crypto andfiat.However, the accused in that case faced only a $35,000 fine and was barredfrom similar financial activities — not prison time.