Bitcoin_inc CEO Arrested For Selling Bitcoin

  • Bitcoin_inc CEO arrested for four days for selling bitcoin on localbitcoins.com
  • Evidence points towards coordinated attempts from Homeland Security to arrest Morgan
  • Morgan's court hearing is on Thursday 22/2/2018 and is likely to set precedent

Comment of the Day @lopp

The Bitcoin ATM creator @NODEfather was recently arrested and held in jail for 4 days (9/2/18 - 12/2/18) under allegations of violating the following law:18 USC 1956 - Money Laundering Instrument. The tweet below shows his custody report that confirms the arrest and the charge against him. He has been released on bond and is awaiting a hearing on Thursday (22/02/2018).

In the US you can send under $10,000 before being required to register as a MSB (money service business). MSB is a legal term used by financial regulators to describe businesses that transmit or convert money. If you classify as a MSB you must adhere to AML legislation and rules which is where the case against Morgan lies.

The Case

The court documents show Morgan sold 9.98 BTC Bitcoin for $14,500 to a homeland security agent using localbitcoins.com in late 2016. However, the coins had an aggregate value of $9,200 at the time and Morgan said he repeatedly asked the buyer for the correct amount of $9,200. Regardless, Homeland Security sent the $14,500 which coincidentally places the amount above the $10,000 MSB threshold.

The DHS (Department of Homeland Security) also claim that they told Morgan the bitcoin was going to be used to buy a machine which manufactures 'hash oil'; this type of machine is supposedly illegal at the federal level, but not in many states. Morgan claims that the DHS didn't specify what the bitcoins were going to be used for prior to the sale and is looking to argue this in court. 

Entrapment?

They briefly detained Morgan almost a year later in September 2017 when he travelled to San Diego after he had been promised investment in his company from a stranger for over 6 months. The stranger based in San Diego turned out to be the DHS.  They detained him and questioned him for three hours asking how many bitcoins he owns amongst other questions. Ultimately they let him go as they didn't have any grounds to arrest him.

On February 9th the DHS arrested Morgan in his Las Vegas residence where he spent 4 days in jail. On Thursday's hearing Morgan will need to prove he made every attempt to sell for under $10,000 and that the buyer had not given him an indication that the bitcoins where going to be used for the purchase of a 'hash oil' machine. What is clear is that the DHS was desperately trying to entrap Morgan and it's a worrying story for bitcoin holders over the US.

There has been significant support for Morgan and he has raised some money for legal fees. @ToneVays and @RichardHeart are two of the biggest Twitter accounts to spread the word. 

Needless to say there have been some trolls, the bitcoin parody account, @buttcoin and @iajanus accused Morgan was trying to raise bitcoin whilst 'conveniently' not being able to access his own funds. After the numerous scams plaguing the crypto Twitter space, it's understandable that people who don't know the details may be suspicious. Once more, facts emerge after Thursday's hearing and hopefully doubts can be put to rest as more details emerge.

The Bigger Picture

Perhaps Bitcoin's most important innovation is providing the first non-state controlled method of storing and transacting value since fiat money was created. This has huge implications on the control of governments and the efficacy of their monetary policies. If nothing else, this case shows the distrust government organisations have of people that choose to store their wealth outside the fiat system.

This is certainly an important case for the bitcoin ecosystem as it sets the precedent for the way in which the US government can treat those who choose bitcoin over fiat. The bitcoin revolution allows citizens to choose the monetary system they want to participate in; one ruled by a powerful elite that favors their interests or a trustless system that runs on code and cryptography. Each citizen has a right to participate in either system without scaremongering tactics that one could consider this case to be.

Support

Morgan has hired David Chesnoff and Richard Schonfield as his legal team and he says DHS has locked him out of his phone meaning he can't access his BTC to pay for legal fees so he is asking for donations or loans backed by his verified Counterparty address.

Alternatively, if you are near San Diego go and show your support in person!

Billionaire Novogratz: Altcoins Won't Pump Like In 2017 Bull Run, Bitcoin Will Dominate

It appears that cryptocurrency prices have finally begun to recover after enduring an extended bear market which lasted throughout 2018.

As the market capitalization of Bitcoin (BTC) and other major cryptoassets continues to rise, several analysts have been drawing comparisons between what they’re seeing in the current market and what they observed during the historic bull market of late 2017 and early 2018.

Commenting on the recent crypto market price movements via Twitter, Ran NeuNer, the host of the CNBC Africa Trader show, remarked:

The market is running but we still haven’t seen the crazy alt pumps, pumps where coins do 40% in a day...is it coming?

Bitcoin To “Outperform” All Other Cryptos “This Time”

As the bitcoin price begins to recover, there have been many predictions made regarding the anticipated performance of altcoins. Twitter user “Crypto Bitlord” (@Crypto_Bitlord), a widely-followed digital asset market analyst, believes XRP, which currently has a market cap of around $16.3 billion, may trade as high as $10.

However, prominent crypto investor Michael Novogratz believes that digital asset traders are a lot smarter this time, when compared to some of the bad investment decisions they might have made during the initial coin offering (ICO) craze of 2017.

Novogratz, who’s the founder and CEO of Galaxy Digital, a full-service crypto merchant bank, has predicted that in this market run, Bitcoin will “outperform” all other cryptoassets.

On May 16th, 2019, the Bitcoin price surged to a 2019 high of $8,373 according to CryptoCompare data. In response to bitcoin’s recent price movements, Juan Villaverde, the Chief Analyst at Weiss Crypto Ratings, told CryptoGlobe: 

Bitcoin could fall to as low as $4,400. But [if] it does, it will be the best Bitcoin buying opportunity since 2015.

“More Good News For New Bitcoin Users”

Villaverde, an econometrician and mathematician focused on developing various crypto index models at Weiss Ratings, believes bitcoin would be a great buy at a lower price (as suggested above) because of the following reasons:

  • “The usage of Bitcoin is near all-time highs – 450,000 transactions per day. That’s up from a low of 150,000 in April of 2018 and approaching the all-time high of 490,000 in December of 2017.”
  • “Despite the high transaction volume, fees on the Bitcoin network are at their lowest levels since August of 2017 – more good news for users.”
  • “The Bitcoin block size is now greater than ever before, thanks to the Segwit technology upgrade.”

Villaverde further noted that the predictions are “based on studying the time patterns in Bitcoin's rises and falls throughout its 9 year trading history.” He explained that the time patterns have been analyzed by using an “algorithm-based market cycles model.”

The Chief Analyst at Weiss Ratings also mentioned that the bear market “ended on December 15th 2018 and the model confirmed this shift in trend on March 26th of this year.”

He added:

Then, after the rally that took place starting on April 25th, the same model told me a new bull market was now underway. The same model indicated a 30% to 45% correction due as of late April-early May and we seem to be experiencing that right now.