Morgan Rockoons, CEO of Bitcointopia has pleaded guilty to wire fraud in a San Diego federal court.
For a long time now, cases of hacking and money laundering using crypto businesses have been exposed and many cases have seen convictions, and several companies have been shut down on the charges of fraud, or as a result of being a victim of such frauds.
However, most of them had a very similar trajectory in terms of the methods of fraud. This specific case has been different in terms of the distinctive nature of the commodity which was being fraudulently sold. Morgan Rockcoons, according to the report, pleaded guilty for the sale of land which did not belong to him.
A Utopia Gone Wrong
Rockcoons had actually advertised in the Nevada high desert a cryptocurrency hub called ‘Bitcointopia.’ He was selling 500-1000 acres plots to investors at 0.5 Bitcoin per acre. This was to turn into a futuristic city based on automation and cryptocurrencies, according to the advertisement. Two investors fell for this mirage of a futuristic business model and even bought plots on these premises. However, in reality, Rockcoons only owned 5 acres.
According to the report, Rockcoons also pleaded guilty of running a crypto exchange which failed to comply with the registration norms of the United States of America. He was, in fact, convicted of helping an undercover investigator launder money.
What is even more concerning is the fact that this is not the first of such events to have occurred in Los Angeles. Another trader running a currency exchange was also convicted of the same charges last October. He was found to be running a Bitcoin-fiat exchange that was unregistered under the US norms.
While such events threaten to undermine the faith of the public in cryptocurrencies, they also pose the question about how a more sustainable regulatory regime can be created.