Two alleged operators of underground bitcoin exchange Coin.mx have been arrested at their homes in Florida by the US Federal Bureau of Investigation (FBI) last Tuesday. Anthony R. Murgio and Yuri Lebedev are charged with operating an unlicensed bitcoin exchange, while the former also faces money laundering charges.
According to the FBI, Murgio and Lebedev along with other suspects operated Coin.mx in violation of federal anti-money laundering (AML) laws set forth by the United States Treasury Department. Between October 2013 and January 2015, Coin.mx is said to have exchanged at least US$1.8 million for bitcoins on behalf of tens of thousands of customers. According to the FBI, moreover, Murgio and Lebedev knowingly exchanged bitcoin for people whom they believed may be engaging in criminal activity.
– Anthony R. Murgio
Additionally, the FBI said that the Murgio sold bitcoins to victims of ransomware attacks such as Cryptowall. This type of malware encrypts the computer of a victim, who is then required to pay a set amount to a certain bitcoin address in order to unlock it. By selling bitcoins to the victims, the FBI, notably, holds Murgio responsible for enabling the criminals responsible for the attacks to receive the proceeds of their crimes.
The FBI said:
“In doing so, Murgio, and his co-conspirators knowingly enabled the criminals responsible for those attacks to receive the proceeds of their crimes, yet, in violation of federal anti-money laundering laws, Murgio never filed any suspicious activity reports regarding any of the transactions.”
The FBI claims that Murgio and Lebedev tried to hide their illegal exchange by operating through a phony front-company named “Collectables Club.” In doing so, the two allegedly sought to trick their banks into thinking was simply a members-only association for collectible items, such as sports memorabilia. Murgio is said to have later on even obtained control of a New Jersey-based federal credit union to transfer Coin.mx’s banking operations to the Credit Union.
While running Coin.mx, Murgio transferred hundreds of thousands of dollars to bank accounts in Cyprus, Hong Kong, and Eastern Europe, and received hundreds of thousands of dollars from bank accounts in Cyprus and the British Virgin Islands.
In a seemingly separate case, a friend of Murgio, Joshua Samuel Aaron, was charged this week for running a securities fraud scheme tied to the computer hacks of JPMorgan Chase and other financial institutions. As opposed to Murgio, however, Aaron, remains at large.
Murgio faces up to 35 years in prison, while Lebedev faces up to ten years.