In a recent telephone interview with Bitcoin Magazine, Hopkins joked that he had never heard of the world's first peer-to-peer cryptocurrency before, but "being a good nerd myself," he had his laptop with him and downloaded the necessary hardware to accept the offer (about half a bitcoin to cover a coffeehouse meal, or "13 or 14 bucks'" worth of magic internet money, if you were wondering).

For Hopkins, that transaction marked the beginning of a years-long journey down the Bitcoin rabbit hole, launching a "O.G." path that included adopting the online teaching persona of Doctor Bitcoin, becoming vice president of Geosyn Mining (based in Fort Worth, Texas), and selling his personally-mined bitcoin for many years to interested parties, either in person for cash or through completely above-board bank wires.

Hopkins claimed that his motivation for selling bitcoin was "mostly to meet people" for the purpose of expanding his professional network. He also stated that he was rarely concerned with making a profit, with the exception of the most significant transactions, and instead focused on converting high-net-worth buyers into long-term clients for his marketing company.

Hopkins mentioned that at the time, there was "no federal guidance at all" regarding bitcoin sales. As a result, he sought regular advice from Texas lawmakers, who reassured him (and published 2017's Memorandum 1037 stating) that they would not be requiring licenses or regulating the sale of bitcoin in the state. Hopkins also mentioned that at the time, there was "no federal guidance at all" regarding bitcoin sales. According to Hopkins, these individuals actively encouraged him and others to "bring innovation to Texas." On the other hand, Hopkins made the announcement on September 5 via his Twitter account that he would be reporting to the Beaumont Federal Correctional Institute "for the crime of selling #Bitcoin a few years ago."

"The Man Behind The Lottery Racket's Kingpin"

The arrest raised questions about what specific crime Hopkins had committed, particularly if he had obtained assurances from Texas lawmakers that he was operating within the law.

In 2019, the Financial Crimes Enforcement Network (FinCEN), a federal bureau within the United States government, will The United States Department of the Treasury published 18 USC 1960, which stipulates that individuals who wish to sell bitcoin and other cryptocurrencies to the general public are required to obtain a "money transmitters' license." Violators could face a prison sentence of up to five years if they attempt to sell bitcoin without first obtaining the necessary license. Although Hopkins has stated that he is currently serving time for this offense, the activity of selling bitcoin was not the one that initially drew the attention of federal law enforcement.

According to Hopkins, one of his former customers was being investigated for possible involvement in a lottery scam in Nigeria. According to Hopkins, the buyer initially told him that she was purchasing bitcoin "for her husband's electronic repair business," and he believed her at the time. However, the buyer later told investigators that she was herself "being catfished by a Nigerian," and this information was provided to Hopkins by the buyer. Hopkins generously referred to this customer as "an unsophisticated user," and he not only sold bitcoin to her on approximately twenty different occasions, but he also patiently assisted and educated her in best custody practices, as well as how to avoid "triggering" banking problems by using specific terms that could result in the closure of her bank account (which is a fairly common occurrence and known concern for Bitcoin enthusiasts, particularly at that time). According to Hopkins, prosecutors later charged him with teaching this woman "how to commit bank fraud" in a dishonest attempt to make him appear responsible for the woman's actions.

"15 armed agents, who waved guns and search warrants…" conducted a raid at Hopkins' family home on the suspicion that he was somehow "a kingpin in a lottery scam" because of the amounts of money that were "flowing to" him. As a result of the raid, over $60,000 worth of Hopkins' personal property was taken from him, according to Hopkins.

Hopkins stated that he was cooperative and "fully transparent" during the raid, and that he informed the federal agents of his public Doctor Bitcoin and professional LinkedIn profile. He also shared details of his previous consulting work on bitcoin and blockchain technology with multiple U.S. governmental agencies, including the Federal Reserve. Hopkins claimed that he even explained in person to the raiding agents some best practices for using bitcoin wallets (for example, auto-generating new addresses at random with every new use). Hopkins was quite surprised that agents of this white-collar crime division were not already well-versed in such technology. Hopkins claimed that he even explained in person to the raiding agents some best practices for using bitcoin wallets (for example, auto-generating new addresses at random with every new use).

Hopkins was confident that these agents would soon realize that they "definitely have the wrong guy" and would even apologize once they became aware of his credentials and the nature of his work (and especially his professed innocence of the lottery scam that was actually under investigation). He was sure of this because he insisted that he was not involved in the lottery scam that was actually being investigated. Hopkins now claims that "what likely happened" was that "they spent so many resources rolling out 15 agents to a guy's house to solve a major crime and came up empty, so they had to find something that I was guilty of" to avoid egg on their faces, and that his named crime became "operating a money transmitters' business without a license, based on some vague guidance given by FinCEN… about a year earlier."

As the case moved forward, Hopkins stated that "they decided to not come just after me, but my wife because she was on my bank account." They threatened both Mr. and Mrs. Hopkins "not just with the money transmitter offense" as well as for the bank-related advice given to his client, which could result in a total of 35 years of imprisonment for both Mr. and Mrs. Hopkins.

"The Government Fights It Hand, Tooth, And Nail" [Hand, Tooth, And Nail]

Hopkins now believes that the agents are guilty of "prosecutorial misconduct or extortion, depending upon how you want to look at it" because they offered to leave his wife and three children out of the proceedings if he agreed to plead guilty to selling bitcoin without the required money transmitters' license. If you want to look at it another way, you could say that this is an example of extortion. But he continued by saying that despite defending what is right or wrong, "I can't leave my family or take a gambit like that; my family comes first regardless of what my principles are," and so he agreed to accept the plea deal.

Hopkins is using his Twitter account and interviews with the media in the aftermath of his sentencing to warn others about "the encroaching state war on privacy, and the general brokenness of the criminal justice system."[rb_related title="More Read" style="light" total="4"]

"I mean start with Ross (Ulbricht); start with (Julian) Assange; start with (Edward) Snowden," the speaker said. Take a look at what is happening with the developer of Tornado Cash (Alexey Pertsev), the delisting of Monero from various exchanges, and every attempt to improve privacy over the past 20 to 30 years, not just in the cryptocurrency industry but in cryptography in general. The government is putting up a ferocious fight against it. It is getting old because people like us… end up getting caught in the crossfire.

Hopkins, who advocated for the "separation of money and state," expressed concern that the government might target more Bitcoin users based on past transactions if Bitcoin users did not contact their representatives and "hold their feet to the fire" to preserve existing First Amendment principles and privacy regulations. It is there every time someone transacts peer-to-peer, such as purchasing a truck with bitcoin, or if I split dinner with you and you pay for your half with bitcoin, you are committing a federal crime. He warned that the requirement that money transmitters have a license, which is outlined in 18 USC 1960, poses a "existential threat."

He stated that "you can see very clearly there's an uptick" in the prosecution of 18 USC 1960 crimes related to cryptocurrencies. "You can see very clearly there's an uptick." And the selection of people to charge or prosecute is "moving away from major case crimes," as the article puts it. "The Department of Justice holds clinics on how to apply the law more liberally," Hopkins maintained.

In addition to bringing attention to his own legal situation, Hopkins is now actively involved with FreeRossDAO (working to free Ulbricht, who founded early Bitcoin darknet marketplace Silk Road, from prison). According to Hopkins, Ulbricht is "a martyr" because his own legal situation pales in comparison to Ulbricht's. Hopkins explained his reasoning by stating, "I sold some bitcoin, and I used money in a way that the government didn't like." My life is a complete mess right now, but I have faith that things will turn around in a year. But Ross won't be getting out of jail any time soon.

"Given enough time, they can come after each and every one of us," Hopkins continued, adding that "if we… do not demand from our government that they reform this law and the application of it."

During the time that Hopkins is behind bars, his son will be responsible for updating and managing his father's Twitter account.

This is a contribution to the blog made by Guy Malone. Opinions expressed are entirely those of the author(s), and do not necessarily reflect those held by BTC Inc. or Bitcoin Magazine.