Nevada Bitcoin broker on LocalBitcoins sentenced to 2 years in prison

Morgan Rockcoons, a Nevadan man accused of wire fraud and operating an unlicensed Bitcoin exchange for using LocalBitcoins, was sentenced to nearly two years in prison.

Operating unlicensed Bitcoin exchange results in a 2-year prison sentence.

Morgan Rockcoons, who also goes by Morgan Rockwell, was sentenced to 21 months in prison by U.S. District Judge Anthony J. Battaglia for wire fraud and operating an unlicensed money transmitting business.

Apart from serving almost two years in prison, Rockcoons was also ordered to forfeit $80,600 in illicit profits.

According to a press release from the Department of Justice, Rockcoons admitted he operated a Bitcoin exchange without registering with the Financial Crimes Enforcement Network of the U.S. Department of Treasury.

While awaiting trial following his Feb. 9 arrest, Rockcoons began promoting Bitcointopia, which led to prosecutors combining these two cases in a superseding indictment.

Rockcoons' sentencing marks an important step for FinCEN and the enforcement of its newly established rules.

According to the new guidelines, those who trade and sell Bitcoin and other cryptocurrencies over platforms such as LocalBitcoins are subject to the BSA. The guidelines noted that this is "Regardless of the regularity or formality of such transactions or the location from which the person is operating."

Rockcoons had been advertising his Bitcoin exchange services on LocalBitcoins.com for years.

Rockcoons' arrest is proof that U.S. regulators are following through on FinCEN's guidelines and cementing their zero-tolerance policy towards unregulated trading.