Mark Hopkins, a Texas resident who uses the moniker “Doctor Bitcoin,” pleaded guilty to operating an unlicensed crypto-based money transmitter business on Tuesday.
According to a release from the Department of Justice, Hopkins allegedly converted U.S. cash into bitcoin for a fee — without checking the source of the cash or enacting proper know-your-customer (KYC) protocols. He supposedly admitted to the courts that he did not acquire proper licensure for a money transmitting business in the U.S. and failed to register the business with the Department of Treasury.
Money transmitter businesses, which fall under the "money services business" umbrella, are regulated by the Financial Crimes Enforcement Network (FinCEN), a federal agency within the Department of Treasury. Money services businesses must develop a robust anti-money laundering program, and submit Suspicious Activity Reports for financial transactions above $2,000 if the cash's source is suspected to be illegal.
Hopkins was also said to be involved in a 2019 incident in which one of his customers, identified as “M.H.,” converted funds gained from a Nigerian lottery scam through Hopkins’ business, according to the DOJ. He allegedly instructed M.H. on how to avoid scrutiny from financial regulators, such as making deposits under $9,500 and misrepresenting the dealings with Hopkins as a marketing campaign payment. In all, Hopkins helped M.H. convert “between $550,000 and $1.5 million” through 37 transactions, according to the U.S. government.
Hopkins faces up to five years in federal prison.