Bitcoin_inc CEO Arrested For Selling Bitcoin

  • Bitcoin_inc CEO arrested for four days for selling bitcoin on
  • 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 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. 


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.


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!

Legendary Value Investor Calls Bitcoin an 'Insurance Policy' Against Inflation

Siamak Masnavi

In a recent episode of the FutureProof podcast, legendary American value investor William H. Miller III—who is the Founder, Chairman, and Chief Investment Officer of investment firm Miller Value Partners, as well as the portfolio manager of mutual funds "Opportunity Equity" and "Income Strategy"—talked about Bitcoin.

Before starting Miller Value Partners, Bill Miller and Ernie Kiehne founded Legg Mason Capital Management, and they worked as portfolio managers of the Legg Mason Capital Management Value Trust from its inception in 1982.

It is important to point out that Miller is not your average fund manager.

As CNBC noted back in June 2018, Miller's 15-year streak (through 2005) of beating the is S&P 500 is still a benchmark no active manager can touch."

With that introduction out of the way, let's take a closer look at what Miller said about Bitcoin in this episode of the FutureProof podcast, where Miller had a discussion—moderated by Jonathan Braunstein—with Mike Novogratz, Founder and CEO of crypto-focused merchant bank Galaxy Digital, that aimed to answer the question "When is the Right Time to Buy Into Bitcoin?".

Braunstein started the conversation by asking Miller when he first got into Bitcoin.

Miller replied:

"I got involved in Bitcoin... around 2013. I think it was trading at around 200 bucks or so, which is where I started buying it, and then it ran up—and going on memory here—to around $1100 or $1200 and then... it collapsed all the way back down to $200 again in 2014

"And I began to buy it again, and so I bought it up to probably around 500 bucks... my average cost is I think around $300."

The moderator then wanted to know why Miller felt those were the right times to buy Bitcoin.

Miller answered:

"Well, Bitcoin has been, as you may know, an extraordinary performer. We call it "digital gold". We're on cryptocurrencies basically ever since it came out, and so I came to it relatively late compared to when it first came out...

"But my thought then was it was a really interesting technological experiment and because the nature of what it was trying to do, it had many different ways to win and my view was that if it became a payment system, if it became a non-correlated asset, any of those things, much less all of them, would lead to a very dramatic move in the the underlying price.

"And that was that was also helped along by the fact that it's limited to 21 million bitcoins, it's decentralized, and it's not able to be tampered with or debased.

"So my view was the distribution there was a huge right skew and with anything you can only lose a hundred percent of what you invested...

"I could make a hundred times my money. I could make a thousand times, maybe more than that, and I can only lose, you know, a hundred percent.

"So, I did it as a technological experiment, and to give me a giving a rooting interest in it and I still haven't sold any Bitcoin."

Then, after Novogratz had explained why he believed that now was the right time for investors place a bet on Bitcoin, Miller was asked if this indded was the right time to buy Bitcoin.

Miller said:

"Absolutely... where I come from in this is that for most assets that you that you buy, especially that your FAs [financial advisors] are putting in client accounts, the more they go up in price, the less value there is to be extracted out of it, and the riskier it becomes.

"Bitcoin in is in the unusual position of being almost the exact opposite of that. It was very risky when it was trading at a dollar or five dollars or ten dollars.

"I think it could have easily disappeared, but at the current price in the high nine thousands, with the all the venture money that has gone into it, with what Mike said [about] the institutional interest, with some of the big-named players he talked about... getting interested, I think it's reached the stage right now where it's actually much safer than it ever has been before.

"Point two is that if you don't have it, then any time is the right time to have it...

"With Bitcoin, what I find interesting is I don't see why an FA would not advise all of their clients to put one percent of their liquid assets in Bitcoin...

"I think if you put one percent in there, you have very little risk of any harm to your financial condition, but the potential to dramatically increase that, and I'll just end on saying, what Ray Dalio believes, which is that we're going to have a new paradigm shift in the overall global global macro position, and that may include or may trigger significant increase in gold...

"My view is that in any environment where gold works, Bitcoin works far far better than gold because it's infinitely divisible, it can be sent at virtually no cost, and it's got other characteristics that gold doesn't have...

"Back in the 70s and early 80s, people were talking about putting five percent of your assets in gold because it's a hedge, it's like an insurance policy in case inflation comes back again as it did in the 70s, and I would say that if that's a sensible thing to do, then then certainly to have one or two percent of your assets in Bitcoin makes makes great sense here."

Featured Image by "SnapLaunch" via