Home Crypto Bitcoin News The Morpheus case: competing theories on what it means for the rest...

The Morpheus case: competing theories on what it means for the rest of us

When computer engineer Theo Chino recently went to visit one of his favorite Bitcoin sellers in sweltering Florence, Arizona, he was forbidden to wear shorts. Trading crypto was out of the question, and, he says, so was the possession of a writing instrument.

That’s because Chino’s visit occurred at the Central Arizona Detention Center, temporary home to “Morpheus Titania,” one of America’s best-known “crypto-detainees.”

Titania, legal name Thomas Costanzo, is there because… well, that depends on who you ask. In fact, there are enough claims and theories flying around to cause an Alex Jonesruption (Legacy Alex Jones, not Alex Jones Cash).

Officially, the initial charge against Morpheus was felon-in-possession-of-ammunition. An old friend, Bob Podolsky, says two newer ones have appeared: “He’s been charged,” writes the former Arizona resident, “with ‘money laundering’ or operating a money transmission business without a license, and conspiracy to do that.”

Ammo was one of the few items which the warrant ordered enforcers not to seize from his modest apartment. And since Homeland Security or Treasury agents don’t usually get involved in hunts for a couple Winchester boxes, it’s safe to assume these weren’t the magnet. But whatever drew authorities to his home in Mesa, it drew a lot of them… FreedomsPhoenix claims at least five government agencies, including the Federal Treasury Department, were present.

Local indie reporter Ernest Hancock, an old friend of the “door-to-door house call banker,” attended Costanzo’s initial detention hearing on April 27 and initially forwarded this explanation of why authorities may have made such a fuss over him and kept him detained so long without trial.

Morpheus Titania arrest
Is the Morpheus arrest an indication that relative crypto-friendliness left the U.S. government with the last administration?

Drug bust

“They were looking for a Bitcoin drug thing,” he said in a late-April call to FreeTalkLive. Based on his observation of official documents and the lack of drug-related charges thus far, Hancock’s thinking, initially at least, pointed toward a fumble in the Feds’ target selection.

“Someone’s not gettin’ promoted over this,” he added. Both Hancock and other “Morphspiracy theorists” who know the free spirited trader claim that he practiced a policy of standing up and walking away if he had reason to believe the money would be used for illegal drugs. The long detention may be attributable to an alleged failure-to-appear in Titania’s past and a previous, lengthy, victimless-crime rap sheet.

We might refer to the above as the “honest mistake” theory… assuming we’re playing a little fast and loose with the word “honest.” Authorities saw, perhaps, some sort of activity pattern which their training outside of Bitcoin associates with drugs. To Bitcoiners, or average folk, it might look innocuous, purely financial. But our “training” is different from that of policy enforcers. This theory probably bodes the best for the crypto-community, as it would indicate the Morpheus arrest is not part of an escalating widespread legal attack by U.S. officials.

General crackdown

Next there is what we might call the “general crackdown” theory, which – particularly in light of the attack on BTC-e – seems to be gaining traction. Podolsky, Titania’s old friend, is a good “spokesman” for this line of thinking. Podolsky believes Washington ultimately cannot tolerate a successful independent currency and will try to make tax-free trading of Bitcoin impractical.

“It seems that Local Bitcoins has become the target,” he said in May. “When they’re through with him they’ll be coming after us.”


Another possibility is what you might call the “wolfpack” theory. The Feds, acting in their unpopular role as “world government,” may treat Bitcoin somewhat like they treat guns. Though firearms (like cryptos) are technically legal in the U.S., the Fed rules governing them are designed to be broken rather than followed. That gives D.C. the opportunity to prey on the herd of gun owners much as a group of wolves preys on a herd of buffalo. They don’t kill off the herd; they treat it more as a source of income. Their raids on it also affect the herd’s behavior, so the selective attacks become a means of exerting control without massive effort.

For his part, Titania’s visitor Chino suspects it was his relative prominence that got Morpheus targeted. “There are not many people selling Bitcoins on Local Bitcoin in the Community,” he writes. “He was an outspoken Bitcoin activist…”

Morpheus Titania prior to his arrest
Morpheus (right), aka Thomas Costanzo, in better times. Image from Titanians.org.

Meanwhile the opposition to Titania’s incarceration – something of which I’m a part – has become more organized. Chino is planning to set up a database to list what the apparent political prisoner is already receiving from supporters and what he still needs. The idea is to prevent two people from sending the same items. The reportedly paperwork-hating dissident does like one type of writing: Anything that lets him read about Bitcoin and similar topics. He’s now said to be running the facility’s library.

Hancock reported Titania’s demeanor in court as “sullen.” By contrast, Chino says the detainee is now upbeat, “hopeful,” in his words, “because he knows that the community is mobilizing in his support.”

Featured image from Pexels

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  1. The search warrant was all about financial, phone and computer records. I think that the feds were hoping they could get him in a drug-related transaction, but they were really going after him for bitcoin. Morpheus has consistently said that bitcoin will stop our government’s unending wars because a bitcoin economy does not permit the deficit financing that pays for wars. Morpheus was an itty-bitty trader in the big scheme of finance, but he was outspoken about 9/11, our endless wars and the federal government as bullies. I think they hated him for that. Morpheus is an idealist and not as scared as a lot of us.


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