With last month’s collapse of the world’s fourth-largest cryptocurrency exchange, FTX, and renewed government attention on regulating the inherently anarchic industry, a tale of two cryptos is emerging: that of the bankers with institutional connections, like FTX’s founder, Sam Bankman-Fried, and that of the libertarian crypto-evangelists who flocked to Bitcoin early as an anti-state, decentralized alternative to fiat money. 

At stake is the future of the industry, and whether cryptocurrency will maintain the outside-the-system ideals laid out in Satoshi Nakamoto’s nine-page Bitcoin founding document that gave birth to the industry.

Early this week, a Bitcoin trader, libertarian activist, and nationally syndicated talk radio host, Ian Freeman, went on trial in federal district court at Concord, New Hampshire, on eight felony charges related to cryptocurrency sales. A self-described “voluntaryist,” Mr. Freeman moved to the Granite State in 2006 as part of the Free State Project and legally changed his surname to Freeman from Bernard. He is now facing up to 70 years in prison on charges of operating an unlicensed monetary transmitting business, conspiracy to do so, money laundering, and tax evasion.

An early adopter of Bitcoin, Mr. Freeman purportedly raked in millions of dollars selling cryptocurrency and operating bitcoin ATMs in and around Keene, New Hampshire. The government contends that he knowingly defrauded banks by concealing the nature of deposits made from crypto sales into personal accounts in his name, in the names of his co-conspirators, and in accounts of “purported churches” he founded, such as the Shire Free Church, the Crypto Church of New Hampshire, the Church of the Invisible Hand, and the Reformed Satanic Church.

Prosecutors also charge that a portion of the money Mr. Freeman earned through bitcoin vending machines and cash-for-bitcoin trades derived from unlawful activity like drug sales and scams. An assistant U.S. attorney, Georgiana MacDonald, said Mr. Freeman operated his business by this “golden rule”: “What you do with your Bitcoin is your business. Don’t tell me your plans.”

Mr. Freeman says the charges amount to a politically motivated prosecution and retaliation for his years of civil disobedience, anti-government rhetoric on his radio show, “Free Talk Live,” and support for the New Hampshire secession movement. “The FBI, the federal government has been very interested in the Free State Project,” he tells the Sun. “For many years, we had the FBI investigating the Keene activists.”

He also says his actions were more about spreading cryptocurrency’s adoption and operating outside state control than making money. “It’s always nice when the number goes up, but, you know, we’re in this whether the number goes up or down because of the ideology of it,” he says.

Mr. Freeman’s alleged co-conspirators — a group dubbed “The Crypto Six” — accepted plea deals to avoid prison. They include his transgender radio co-host and declared “high priestess of the Reformed Satanic Church,” Aria DiMezzo; a former girlfriend, Renee Spinella, and her husband, Andrew Spinella; and a man legally named Nobody (formerly Richard Paul). Mr. Freeman is the only one who refused a deal, and whether he goes to prison for life will soon be in the hands of a jury.

Meanwhile, FTX’s founder and disgraced former CEO, Mr. Bankman-Fried, who lost $8 billion in customer funds — in some cases people’s life savings — through alleged fraud that led to the firm’s bankruptcy, is chilling in his palatial estate in the Bahamas and was invited to testify before Congress next week.

“It’s interesting how differently SBF has been treated by the media and government. He and his FTX cronies gave over $70 million in stolen funds to Democrats and $11 million to Biden,” a Bitcoin investor who is managing director at Watchdog Capital, Bruce Fenton, also a former Republican U.S. Senate candidate in New Hampshire, tells the Sun in a statement. 

The chairwoman of the House Financial Services Committee, Maxine Waters, who has close ties with people at FTX and was photographed with Mr. Bankman-Fried in April, initially told Democrats she did not plan to subpoena Mr. Bankman-Fried, instead tweeting this cordial message at him: “We appreciate that you’ve been candid in your discussions about what happened at #FTX. Your willingness to talk to the public will help the company’s customers, investors, and others.” 

After backlash, though, she clarified that she would subpoena Mr. Bankman-Fried if he didn’t cooperate. The Senate Banking Committee has also issued a formal request for Mr. Bankman-Fried to testify in person next week, threatening in an open letter to subpoena him if he fails to comply. 

On Friday morning, Mr. Bankman-Fried tweeted that he is “willing to testify on the 13th,” and will “try to be helpful.” 

Mr. Freeman is getting much different treatment. In March 2021, the FBI raided Mr. Freeman’s home at night, arriving with two armored vehicles, breaking through a first-floor window, flying a drone through his home, and seizing $200,000 in cash, precious metals, and two Casascius bitcoins  — physical bitcoins valued at 101 bitcoin, or nearly  $5 million at the time. His radio studio, the so-called Bitcoin Embassy in Keene, and the homes of the other members of the Crypto Six were also raided.

Mr. Freeman doesn’t dispute that he sold cryptocurrency without a license — he even gave away cryptocurrency as part of his evangelizing, both on-air and in his small New Hampshire city of Keene, where he convinced local businesses to accept the digital currency — but he tells the Sun that his attorney at the time told him a license “wasn’t necessary, because we weren’t doing what they call money transmission.” The government disagrees, contending that Mr. Freeman “deliberately closed his eyes to a fact that would have otherwise been obvious to him.”

Founded in the wake of the 2008 collapse of Lehman Brothers and the start of the Great Recession, Bitcoin promised an open source, decentralized currency that did not rely on the big banks and governments that had spawned the crisis, and the language around its creation was filled with idealism. Like most all utopian movements, the crypto world initially attracted both visionaries and fraudsters. 

As the value of cryptocurrency skyrocketed in the last few years, the industry started attracting average investors — as well as the very bankers it sought to supplant. Large-scale exchanges consolidated assets, and the same problems crypto was meant to circumvent are now starting to plague it. FTX is the latest and largest of these destabilizing quakes.

The recent rush toward cryptocurrency regulation, some of which Mr. Bankman-Fried lobbied for in Congress, could now threaten the libertarian principles on which the whole concept of Bitcoin was founded. “It’s unfortunate that the FTX theft of customer funds is being used as a rallying point for even more regulation. Stealing and fraud is already illegal,” Mr. Fenton says. 

The story of Mr. Bankman-Fried is very much in its infancy. He will likely face charges. Yet for supporters of Mr. Freeman, the uneven treatment is proof that even in the world of crypto — once hailed as an antidote to state monetary control — political connections and donations can tip the scales of justice.

They also fear that the specter of government intrusion in the industry poses an existential crisis. “People like us will never get to write the regulations,” the owner of “Free Talk Live” and a cryptocurrency investor, Mark Edge, tells the Sun. “Satoshi Nakamoto created Bitcoin to crush the world banking system, and we can either give it over to them with a bow on it, or we can fight to keep ‘the People’s Money.’”