Bitcointopia founder admits to selling land owned by the US government

A Bitcoin entrepreneur who once had a vision of a “crypto utopia” has pleaded guilty to wire fraud and selling land he didn’t own.

Bitcointopia founder Morgan Rockcoons pleaded guilty to the charges in San Diego federal court, reports the Los Angeles Times.

Rockcoons also pleaded guilty to conducting an unlicensed money transmitter business after he attempted a Bitcoin-for-cash sale with an undercover US Homeland Security Investigations agent.

Rockcoons’ Bitcoin exchange service – which was openly advertised online – first drew the attention of federal agents back in 2015.

Under federal law, Bitcoin exchanges are subject to the same treatment as money transmitters. They must be registered with the Financial Crimes Enforcement Network, the arm of the US Treasury Department which combats money laundering with regulations.

Exchanges must also know the identity of their customers and report any transfers of more than $10,000 to the government.

Reportedly, at the end of 2016, the undercover Homeland agent posed as a hash oil manufacturer looking to buy equipment in Bitcoin.

Rockcoons has allegedly admitted in his plea agreement that he transferred roughly $9,200 in Bitcoin to the agent for $14,500 in cash – keeping the remainder as a transaction fee.

Despite being arrested, he launched a real estate venture called Bitcointopia while out on bail, advertising parcels of land in Elko County, Nevada.

He was offering 500 to 1,000 acre plots for 0.5 Bitcoin per acre. His aim was to build a city of the future centred on crypto, automation, and technology.

He stipulated in the plea agreement that at least 10 investors had bought land from him.

Rockcoons owned less than five acres on two non-contiguous plots, according to prosecutors. Most of the land is actually owned by the federal government.

Reportedly, investors have lost at least $45,600 as a result of the incident. Rockcoons is now facing up to 20 years in prison on the wire fraud charge and up to five years on the money transmitter charge.

The plea deal has arrived a month before the trial was due to start.

Interested in reading more about federal cases in the crypto space? Discover how the FBI raided offices of a tech hub used for unauthorised crypto trading.