Recently we have a growing number of arrests in the digital currency space as law enforcement officials have focused on shady dealings in the crytpo-world. Recently US citizen Morgan Rockcoons has been sentenced to fines and prison time for running unlicensed money exchange services on LocalBitcoins – this article was sourced from Bitcoinmagazine and it attributed to Landon Manning. This man arrested, Mr Rockcoons was advertising himself on a trading network as a peer-t0-peer facilitator as he made over 1,000 transactions with hundreds of Bitcoin users. He was brought to justice by the US Department of Justice – DOJ – on charges that his business was not registered with the Financial Crimes Enforcement Network or FinCEN. He has carried out a protracted legal battle that now seems to be coming to an end.
Our View – First of all the number of peer-to-peer transactions are not known but the key is that too many people are building thriving businesses and this poses many problems for regulators and tax collectors. More importantly, when we see the organized crime syndicates are involved in every shady business from drugs to gun running, it is natural that the government agencies step in and do their job.
And yes it gets more serious. The shutting down of operation in Iran, LocalBitcoin.com, was a target for US sanctions against this country that could very well use digital currencies to buy materials for all types of weapons. There is growing evidence that digital currencies are being used by Russia, North Korea and now as stated in these recent articles, Iran. More on this topic in the coming weeks.