Who is KnightMB? The Billion-Dollar Bitcoin Miner Who Went Too Far
Have you ever wondered what happened to some of the cryptocurrency pioneers who made it big in the early days of Bitcoin, only to later disappear? One of them is Michael Brown, also known in virtual spaces as KnightMB. So, who is KnightMB? Michael Mancil Brown is an IT specialist from Tennessee and an early Bitcoin miner who was active in the Bitcointalk forum and mined 371,000 BTC in 2010 after convincing his employer to mine Bitcoin for a new project that was aimed at exploring the use of cryptocurrency to back reloadable payment cards, but the company lost interest and sold him the entire project’s files, including the 371k BTC stash, for $5,000, which was even back then a major loss, and as of December 2024, is worth more than $37 billion, a whopping 99.99999% loss. Michael claims to know Satoshi’s identity from having private conversations with him, he also claims to have spent it all on donations to WikiLeaks and funding his projects, including a now-defunct crypto project called Timkoin.
Michael's story took a darker turn in 2016 when he was convicted of wire fraud and extortion after attempting to extort $1 million in Bitcoin from Mitt Romney by threatening to release stolen tax returns, and although Michael maintained his innocence throughout the trial, claiming he was framed by his friend, the evidence presented against him led to a prison sentence.
The Early Days: Bitcoin and the Forums
Brown’s Bitcoin journey began in 2010 when cryptocurrencies were still a fringe concept and BTC was changing hands at below $0.1. He would frequently hang out in early crypto communities like Bitcointalk, often graced by the presence of the greats - Satoshi Nakamoto and Hal Finney themselves.
It was here that Brown, who is KnightMB as it will turn out, rubbed digital shoulders with none other than Bitcoin’s pseudonymous creator. More than that, he would directly converse with him/her/them (we’ll probably never know, though Brown’s posts suggest he believed it was a guy) on matters relevant to the development of the Bitcoin network.
(Image credit: Bitcointalk)
Imagine logging into a forum in your jammies, chatting about digital gold with a stranger who might be the most famous unknown person in tech. That was Tuesday for KnightMB. And here’s where the intrigue thickens: Brown claimed not only to have talked with Satoshi but also suggested he knew his true identity. “I can’t say if he is alive or dead right now,” Brown said at the time.
(Image credit: Bitcointalk)
He also boasted of having accumulated a stash of 371,000 BTC, placing him among the top 10 Bitcoin holders in the world, side by side with Satoshi Nakamoto, Ross Ulbricht, Roger Ver, Mark Karpeles, Jimmy Zhong, and, of course, the FBI (due to all their crypto seizures). So it’s hardly a surprise that, at this point, many started to wonder who KnightMB is.
(Image source: Bitcointalk)
Outside of the cryptoverse, it appears that Brown led a quiet life. His family and friends in Tennessee thought he was just another IT specialist. He even made the news after creating a hybrid electric bike that went up to 35 miles per hour, to counteract the rising gas prices, as he explained.
As it happens, his retrofitted mountain bike, which cost him $1,300 to build from scratch, was powered by a $150 German-made brushless 400 W electric motor in the hub of the front wheel and two lightweight nickel metal batteries. The wires from the battery pack to the motor would run along the main frame, the throttle worked much like in a motorcycle, and it was very quiet.
Mining the Future: Brown’s Bitcoin Hoard
To say that mining Bitcoin in 2010 wasn’t the sleekest operation would be an understatement. It certainly didn’t involve today’s fancy setup of custom ASIC rigs humming in temperature-controlled data centers. But Brown was a believer, and was there for some of the biggest Bitcoin moments.
Remember that pizza bought entirely by BTC? He certainly does.
(Image credit: Bitcointalk)
For Brown, the mining effort involved persuading his employer to let him use company servers to mine what he described as “digital money for nerds.” Remarkably, his arguments bore fruit and the C-suite greenlit the project, allowing him to mine over 370,000 BTC for the project that aimed to use the crypto to back reloadable payment cards.
To make this happen, he mined a massive amount of BTC using Amazon’s cloud services. Brown also purchased it from community members on Bitcointalk, and then consolidated it all into one large wallet. But, this gig didn’t last much longer.
As he recalled on the forum, the company eventually lost interest in mining Bitcoin. However, Brown apparently convinced the bosses to sell him their stake in the project for $5,000, getting the entire stash of 371,000 mined BTC in the deal. Today, this amount of Bitcoin would probably be enough to buy a small country.
(Image credit: Bitcointalk)
Talk about the ultimate ‘take this job and shove it’ moment. While his bosses saw Bitcoin as just another IT expense, Brown walked away holding what could’ve been their golden ticket to a private island. A familiar story of naysayers who later probably regretted their decision.
If it seems unbelievable to you that they would sell the project so cheaply, you’re not alone. Other members on Bitcointalk expressed their amazement at such a turn of events, especially considering that Bitcoin was trading at $0.9 in February 2011 (when KnightMB made his offer), before a massive hike to $7.2 in May.
(Image credit: Bitcointalk)
In other words, they sold it to him at a measly $0.013 per BTC, when selling it at, say, a median price between $0.9 and $7.2 (which is $4.05) would’ve easily earned them $1.5 million at the time (presuming they sold him the BTC somewhere between February and May). As it appears, the company truly seemed to have had no idea what they had on their hands to make such a poor deal for themselves. As KnightMB said:
(Image credit: Bitcointalk)
By the time his Bitcoin stash had appreciated to millions, KnightMB mysteriously vanished from the crypto community for a while, leaving many to wonder what had happened to his massive trove. In his words, in 2012, when the community again started to mention him, and he wanted to clear the air, the story of his Bitcoin collection broke out, and people were asking him for money.
For this reason, he “had to step back from the forums for a while as it was a good place for people to chase me down.” As for his Bitcoin holdings, he said that he had spent or donated it all, among others to WikiLeaks, a non-profit media organization and publisher of leaked documents founded by Julian Assange.
“A lot of bitcoins were spread around the community to help people at first, but it kind of got out of hand. Ultimately, a large portion ended up being donated to wikileaks.org, so I’m certainly not the person sitting up top a large pile of bitcoins anymore. The rest went to paying off small debts and the very last of it was just recently donated to wikileaks.org again.”
On top of that, he said that a “large portion of my past time has actually been invested in the creation of an alternate digital currency for the last few years because I always thought there was a better way to do it.” He was referring to the Timekoin (TK) cryptocurrency (more on that later).
That said, some of the commenters weren’t convinced, with one of them arguing it was just an excuse to get all the heat off his back. The commenter pointed to his post from 2011, in which he said he was “keeping my BTC in several secure places and the wallet files I’ll make sure never to touch my PC for security reasons,” and was keeping it as a retirement fund.
But that was about it from KnightMB on the matter, who offered no other explanations. Instead, he would occasionally comment on other, unrelated topics (including Timekoin) on the forum until January 2016, when he posted his last entry on Bitcointalk, letting people know he had put together a Timekoin FAQ document.
In June 2018, a Bitcointalk user xtraelv started a thread about KnightMB, wondering what happened and pointing out that his account “looks like it got sold or hacked some time in 2016 / 17,” as it “went from only English posts suddenly to only Turkish.”
This user also shared a few excerpts regarding the Secret Service raiding Brown’s house twice. The first time, it was in connection with the theft of encrypted customer information from a Farm Bureau website, and the second involved the highly publicized story of attempted extortion of Governor Mitt Romney.
The Extortion Scandal: Mitt Romney’s Tax Returns
While Brown’s early Bitcoin ventures are the stuff of tech lore, his behind-the-scenes narrative took a sharp, criminal turn in 2012. Federal authorities alleged he had orchestrated an audacious extortion scheme involving Mitt Romney’s tax returns, after he had already been raided by the Secret Service in 2009 (and cleared of all charges).
“On Nov. 19, 2009, the Secret Service raided his house. Brown was under investigation after someone allegedly stole encrypted information on 1,000 customers from a Farm Bureau website.”
At that time, Brown says he was working at Farmer Insurance Group, where a manager hired him to organize the database into a spreadsheet ordered into names, addresses, phone numbers, and social security numbers of the customers. Per his story, he entered “everything except the social security number part because I wasn’t sure of the legal status of doing that.”
After a few months of back-and-forth with the company on the issue, he said he had threatened to go to the media, to which the higher-ups finally reacted. But their reaction seemed to have missed the point, landing Brown in trouble with the law.
By his admission, they confirmed that no one should have access to any customer’s social security number. But, instead of fixing the problem, they “called the federal government and told them I had stolen their customer data which contained tens or hundreds of thousands of social security numbers.”
Luckily for him (at least at that time), no charges were ever filed and the case was dropped, following “many months and many visits to the Secret Service office in Nashville.” His workstation, which the Secret Service took with a search warrant, was returned to him damaged.
And now he was being investigated yet again, this time in connection with a ransom scandal that involved a Republican presidential candidate and governor Mitt Romney who, at the time, ran against the eventual winner, the re-elected President Barack Obama.
Specifically, the U.S. government was accusing Brown of extortion. They believed he had stolen Mitt and Ann Romney’s tax returns and that he was holding them for a $1 million ransom, claiming to possess these confidential files by swiping them from PricewaterhouseCoopers (PwC) servers.
(Image credit: Wayback Machine)
Aside from the Democratic and Republican parties in Franklin, the accounting behemoth received the same letter. Both contained one Bitcoin address to prevent the release of these documents (1HeF89wMjC48bWNgWvVo7Wu3RaLW8XVsE8), and a different one to support their full release (12AP6iCwRNFQqKLStH3A4b4hw3SL6RaNgB).
If the print is too fine for you to read, the tl;dr of the ransom letter sent to PwC is the threat of sending an encrypted copy of Romney’s most recent tax returns to the media, unless the parties who didn’t wish to have the encryption key released as well paid $1 million in Bitcoin to the listed address.
At the same time, another option was offered. Those who actually wanted the documents to see the light of day, would themselves need to pay the same amount in Bitcoin to the second address listed in the letter for this to happen.
Another Pastebin message detailed how the theft of the documents at a PwC office in Franklin, Tennessee, allegedly took place:
"Romney's 1040 tax returns were taken from the PWC office 8/25/2012 by gaining access to the third floor via a gentleman working on the 3rd floor of the building. Once on the 3rd floor, the team moved down the stairs to the 2nd floor and setup shop in an empty office room. During the night, suite 260 was entered, and all available 1040 tax forms for Romney were copied."
PwC denied the claim that a hacker group stole Romney’s tax returns from its Tennessee office. According to Chris Atkins, the firm’s managing director of U.S. public relations, it was “working closely with the United States Secret Service, and at this time there is no evidence that our systems have been compromised or that there was any unauthorized access to the data in question.”
In the early days of Bitcoin, this was explosive headline news. According to a federal search warrant, the Secret Service agents were looking for “records and information relating to tax information of Willard M. Romney and Anne D. Romney,” following an investigation that began on September 5, 2012, just over a week before.
The search warrant also stated that they were to raid the residence of the suspect, Michael Brown, for all evidence of accessing computers without authorization to obtain tax information and demands for payment in exchange for releasing data, as well as access to the computer network of PwC.
During a televised interview, Brown denied the charges, proclaiming his innocence and suggesting he was being framed. As he said, at the dawn of September 14, Secret Service agents kicked down the door to his home and forced him and his wife out of their bed in handcuffs, with their children present.
"They said they're here to serve a search warrant for Romney's tax returns. My first reaction was, 'You've got to be kidding me.' (...) They made it very clear that they were absolutely certain that I was the mastermind behind the whole thing.”
Considering that Brown was a staunch campaigner for President Barack Obama in 2008, many saw this as another motive (aside from the obvious monetary gains). As the interviewer asked Brown if he would have gone “to this extreme length to try and get the president elected,” he gave a firm “absolutely not.”
Nonetheless, the evidence, including a digital trail linking him to the ransom demand, proved damning. He was told that at least one of the flash drives sent with the threat letters was once connected to one of his computers, but Brown argues that this could’ve happened when he repaired a family friend’s computer four years prior.
To add an ironic twist, one of the hard drives also contained a photo of his cat - a detail that investigators traced back to a home surveillance video of his pet. You know things are bad when your cat becomes Exhibit A in a federal trial. But again, Brown said the cat belonged to the above friend, and that he had mentioned that to the agents.
As he tells it, “the amount of strain that this has put on us - both emotionally and financially - is pretty great.” To try and offset at least the material burden of his legal troubles, Brown set up a website to appeal for financial aid with his PayPal and physical address.
“I am a self-employed wireless Internet service provider and web hosting/designer in Franklin, TN, barely scratching out a living for my young family. You can see from the search warrant that virtually all of the equipment and software I use for my business was seized, most of which to date has not been returned to me. Some of the items that have been returned were damaged. (...) I desperately need financial support to replace all the equipment and software programs needed to get my business functioning 100% again and for my family’s survival.”
In 2016, Brown, who is KnightMB behind the scenes, was convicted on six counts of wire fraud and six counts of using facilities of interstate commerce to commit extortion by a grand jury. He was sentenced to 48 months in prison and ordered to pay $200,000 in legal fines.
One year later, Brown managed to get his sentence reviewed. He claimed others had access to his computers, and that his friends were the actual crooks. The court upheld his conviction, but did order him to be re-sentenced, considering his original sentence as too long.
According to Brown, it is the lawsuit’s costs and the equipment taken away by the investigators that left him destitute. As to what happened to his 371,000 BTC remains a mystery - although it is possible that what he says about donating it to WikiLeaks is true, but also at least a portion of it might have gone to pay for his legal fees.
Yet, rumors continue to circulate that the funds were either hidden, lost, or sold off during Bitcoin’s early price surges. Brown’s denial of the matter only deepens the intrigue, leaving crypto enthusiasts to speculate about the fate of one of Bitcoin’s earliest and largest caches.
In his interview with Channel4, when asked if he was still involved in Bitcoin, he said:
“Years ago I was, but not today. I am actually involved in a completely different project over at timekoin.org and have been for years.”
The Rise and Fall of Timekoin
Shifting his focus away from Bitcoin, Brown devoted his efforts to developing a new cryptocurrency project called Timekoin (TK). Designed to offer an alternative to traditional blockchain validation methods, Timekoin aimed to solve Bitcoin’s scalability issues with a more energy-efficient model.
(Image credit: Timekoin)
According to its description, Timekoin was created as the “first non-experimental application of an open encrypted electronic currency system on a public network,” where “everything is laid out for view in the program GUI,” fostering transparency - which is also one of our commitments here at PlasBit.
Per the FAQ document on Timekoin’s website, the protocol aimed to enable a server group to create its own digital currency for processing transactions in specified, incremental amounts, for a required period. The servers would be selected by consensus among all the network participants.
In its philosophy, Timekoin seemed to revolve around the concept of time as a currency, the beginnings of which date back to the late 1980s - but with the advantages of today’s increased communication accessibility to anyone with a computer and internet connection.
As the document points out, back then, users would communicate and exchange files using modem dial-up bulletin boards, which would hike up their phone bills, leading system operators to limit online time.
To address this issue, users started trading ‘time’ as currency in exchange for files and services, but this concept of electronic currency died out because of the limitations and expenses of running a bulletin board system.
Regardless, the Timekoin project ultimately flopped due to a lack of adoption, limited technical innovation, and Brown’s tarnished reputation. In hindsight, Timekoin became just another footnote in the crowded history of Bitcoin spinoffs that failed to achieve the popularity of their predecessor.
Timekoin promised to revolutionize crypto, but instead, it became a reminder that not all ideas age like fine wine. Some are more like milk.
Lessons from KnightMB and Other Fallen Bitcoin Giants
Brown isn’t the only Bitcoin mogul to end up behind bars. Ross Ulbricht (or ‘Dread Pirate Roberts,’ as he called himself online), creator of the Silk Road marketplace, is serving a life sentence for facilitating drug trafficking through his platform. He is waiting for President-elect Donald Trump to fulfill his promise of pardoning him.
Then there’s Charlie Shrem, an early Bitcoin advocate, who served two years for aiding an unlicensed money-transmitting business. Shrem co-founded the now-defunct startup BitInstant and quickly became a millionaire. However, he was arrested in 2014 for helping launder $1 million in Bitcoin that ended up on Silk Road.
And let’s not forget Jimmy Zhong, a.k.a ‘Loaded,’ who was convicted in 2022 for stealing over 50,000 BTC from Silk Road. Zhong’s extravagant lifestyle of partying and splurging on dubious characters, along with multiple mistakes, ultimately cost him his freedom, which you can read about in this article by PlasBit.
Conclusion: Who is KnightMB, Really?
So, who is KnightMB - a cyber crook or just a victim? Brown himself remains adamant he was set up by someone in his circle of friends, although the evidence and the grand jury all pointed in his direction. If he truly is at fault, he has already paid his debt to society and is now a free man.
As to what happened to his crypto fortune, which today would amount to a mind-numbing $37 billion, is another question mark. Has he really spent it all on WikiLeaks and legal fees? Or has he lied so people would stop begging (and perhaps even targeting) him, and has it stashed away somewhere?
Regardless, his story is just like how we like them here at PlasBit - a fascinating tidbit in the ever-intriguing and dramatic world of cryptocurrency, revealing all the opportunity, volatility, scandals, and transgressions it hides or shows out in the open.
