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Bitcointopia: How Libertarian Fantasy Turned Into Crypto Dystopia

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On 21 October Morgan Rockcoons tweeted at Donald Trump, after the president’s sweeping visit to Nevada before the midterms:

“Thanks for coming to Elko, we are building a brand new MegaCity here that will provide millions of jobs for Americans in the immediate future thanks to Bitcoin, AI and Nevada.”

Seven days later Rockcoons was arrested by Homeland Security and charged with an elaborate crypto fraud under which prosecutors say Rockcoons made almost $100,000 selling land he didn’t own to crypto enthusiasts.

Bitcointopia

Utopias are all the rage in the blockchain world these days, with idealists using their newfound wealth to build real-world communities that embody their values of decentralization.

The most high profile is Blockchains LLC, led by ethereum multimillionaire Jeffrey Berns.

Berns made his millions investing in the ethereum token, ether, during 2015 and cashed out last year.

Since then he’s spent a reported $300 million buying up 67,000 acres of Nevada desert near Tesla’s Gigafactory, hired a staff of 70, and is in the process of launching an elaborate crypto community which he’s calling a “distributed collaborative entity.”

On the other side of Nevada, 300 miles east of Berns’ project, Morgan Rockcoons was developing his own crypto utopia.

In May Rockcoons published The Blockchainist Papers on Medium, a libertarian manifesto to create the new city of Bitcointopia which he said would eventually secede from the U.S. and establish itself as a tax-free 1,000-acre crypto haven.

“We are in the process of building foundations, sidewalks, roads, building facilities like laundromats, restaurants, shops, offices as well as public services like communications, water treatment, electrical production & internet services,” he wrote on May 6.

Bitcointopia’s website launched shortly after with sales of one-to-three-acre plots to be sold at 0.5 bitcoin per acre—or around $3,200 an acre at current bitcoin prices.

In June Rockcoons told Vice that the Bitcointopia project had now grown to 3,000 acres, and “will be a mixture between living in the wild west and being outside, and living in a technological city like Palo Alto.”

The only problem, according to prosecutors late last month, was that Rockcoons didn’t actually own the land.

Morgan Rockcoons

Rockcoons, who goes publicly by the name Rockwell, spent his early 20s touring the U.S. in a band and working as a contractor, before being taken in by the Occupy Wall Street movement and then joining several crypto projects since 2011.

This April, ahead of Bitcointopia’s launch, 31-year-old Rockcoons described his life as dedicated “to protecting, promoting and preserving Bitcoin and its Blockchain.”

His LinkedIn profile today lists eight “current” positions at various crypto companies, including as CEO of Bitcoin Inc., the Nevada-registered holding company behind Bitcointopia.

On 28 October Rockcoons was arrested by Homeland Security, according to a search warrant filed last week. Agents were tipped off by four crypto enthusiasts who’d invested in Bitcointopia but who hadn't received land deeds from Rockcoons.

The problem, according to the Nevada Records Office and federal law enforcement, was that Rockcoons owned only 4.9 acres of land in Nevada (which he paid $4,300 for, or around $877 an acre), despite Bitcointopia having “sold” over 18 acres by the end of July.

To make matters worse, Rockcoons launched Bitcointopia while on pretrial release after allegedly running an unlicensed money transmitting business through which he exchanged more than $10,000 for bitcoin with an undercover agent without reporting the transaction.

Las Vegas-based attorneys David Chesnoff and Richard Schonfeld have been retained by Rockcoons to fight the earlier charge of unlicensed money transmitting and told the San Diego Union-Tribune that Rockcoons will also plead not guilty to this latest charge.

Neither Rockcoons nor Chesnoff and Schonfeld have yet responded to Forbes' request for comment.

President Trump has yet to reply to Rockcoons’ tweet.

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