Unlicensed Bitcoin Exchange Coin.mx Operator Sentenced to Five and a Half Years in Prison

The former operator of Coin.mx, Anthony Murgio, has been tried and sentenced to five and a half years in prison, for running an unlicensed bitcoin exchange suspected of aiding and facilitating money laundering. Also Read: Assisting in Bitcoin Purchases for Ransomware May Be Illegal in the US Coin.mx Has Been Accused of Processing Millions of

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The former operator of Coin.mx, Anthony Murgio, has been tried and sentenced to five and a half years in prison, for running an unlicensed bitcoin exchange suspected of aiding and facilitating money laundering.

Also Read: Assisting in Bitcoin Purchases for Ransomware May Be Illegal in the US

Coin.mx Has Been Accused of Processing Millions of Dollars Between 2013 and 2015 Despite Being Unlicensed

Anthony Murgio pleaded guilty to three conspiracy counts, including bank fraud and operating an unlicensed money transmitting business. The thirty-three-year-old is the former operator of coin.mx, a bitcoin exchange that has been suspected of assisting hackers launder cryptocurrency and has been linked to a data breach at JPMorgan Chase & Co.

Coin.mx Operator Sentenced to Five and a Half Years in Prison

Coin.mx has been accused of processing millions of dollars between 2013 and 2015 despite being unlicensed. Prosecutors said that Murgio and co-conspirators processed funds on behalf of the victims and owners of bitcoin-based ransomware programs. Assistant U.S. Attorney Eun Choi described Mr. Murgio’s facilitation of ransomware victims accessing bitcoin as “exploit[ing] their desperation to personally profit from them.” Many within the cryptocurrency have raised concerns about Murgio getting charged for aiding the victims of ransomware to obtain bitcoins, arguing that such could lead to bitcoin exchanges being unwilling to work with ransomware victims – rendering ransomware victim’s unable to prevent the deletion of important files and data when required.

It is also alleged that a since-liquidated New Jersey credit union was taken over in order to obscure their financial activity, with Antony Murgio’s father pleading guilty to an obstruction of justice charges pertaining to the credit union.

Manhattan U.S. District Judge Alison Nathan Described Coin.mx’s Illegal Activities As “An Effort Based on Ambition and Greed”

The criminal investigations have seen nine individuals charged with felonies relating to the JPMorgan hack, which breached more than 83 million accounts.

Coin.mx Operator Sentenced to Five and a Half Years in Prison

Manhattan U.S. District Judge Alison Nathan described Coin.mx’s illegal activities as “an effort based on ambition and greed”, and Mr. Murgio as having created a “pyramid of lies”. Antony Murgio was emotional throughout the proceedings, on numerous occasions losing composure whilst expressing his “enormous regret”. “Believing what I was doing was OK did not make it OK,” Murgio stated. “I am wiser today than when the case began, and I am sorry for all the damage I caused to so many people.”

In March, a Manhattan jury convicted New Jersey pastor Trevon Gross and Florida software engineer Yuri Lebedev of scheming to conceal Coin.mx’s activities from banks and regulators. The two individuals are currently awaiting sentencing.

Coin.mx’s owner, Gery Shalon, has pleaded not guilty to U.S charges following his extradition from Israel.

Do you think that bitcoin exchanges should be able to assist the victims of ransomware in obtaining bitcoins without having to fear prosecution? Share your thoughts in the comment section below!


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Colombia Clarifies Stance on Bitcoin

Colombia Clarifies Stance on BitcoinColombia’s top financial regulator published a circular about digital currency last week, naming bitcoin several times. Citing its potential risks, the authority clarified its stance on the cryptocurrency. Also read: Colombia’s Poor Banking Infrastructure Great Potential for Bitcoin Bitcoin in Colombia The Colombian government and central bank have made statements in the past about bitcoin, but

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Colombia Clarifies Stance on Bitcoin

Colombia’s top financial regulator published a circular about digital currency last week, naming bitcoin several times. Citing its potential risks, the authority clarified its stance on the cryptocurrency.

Also read: Colombia’s Poor Banking Infrastructure Great Potential for Bitcoin

Bitcoin in Colombia

Colombia Clarifies Stance on BitcoinThe Colombian government and central bank have made statements in the past about bitcoin, but no laws have been passed and a clear definition has yet to emerge of how the law treats bitcoin in the country.

While Colombian banks have been restricted from handling it, the number of bitcoin users in the country has been growing substantially. At Localbitcoins, the weekly volume for Colombian pesos surpassed 2 billion, worth roughly $663,000 USD, for the first time at the end of May.

Head of the Financial Superintendency of Colombia, Jorge Castaño Gutiérrez, published a circular last week, clarifying the regulator’s stance on the digital currency.

Not Currency

Colombia Clarifies Stance on Bitcoin
Jorge Castaño Gutiérrez

Referencing past circulars, Gutiérrez reiterated that no digital currency has been recognized as currency by the legislator or the monetary authority. Citing Article 6 of Law 31 of 1992, he said Colombia’s only monetary unit and unit of account is the peso issued by Banco de la Republica.

In addition, Article 8 of the same law states that legal currency, which consists of banknotes and coins, must be expressed in the peso and “will be the only legal means of payment.” He described, “bitcoin is not an asset that can be considered a currency because it does not have the support of the central banks of any countries,” affirming that:

Bitcoin is not a currency of Colombia and, therefore, does not constitute a means of payment or legal tender.

Not Securities

Gutiérrez maintained that digital currencies do not have value under the capital markets reform bill, known as Law 964 of 2005, therefore they are not part of the Colombian securities market infrastructure. They do not constitute a valid investment and their operators are not authorized to advise and/or manage operations on them. He detailed:

This Superintendency has not authorized any supervised entity to guard, invest, broker or operate with such instruments, nor to allow the use of its platforms by the participants.

Unauthorized but Not Banned

Colombia Clarifies Stance on BitcoinWhile digital currency is not banned in the country, the Superintendency reminded the general public in the circular that “it is up to each person to understand and assume the risks inherent in virtual currencies if they choose to deal with them, since they are not protected by any type of private or state guarantee,” Gutiérrez explained. “Its operations are also not eligible for coverage by deposit insurance.”

The circular reiterated that digital currency businesses are “not authorized to guard, invest, mediate or operate with these instruments, nor allow the use of their platforms to carry out operations with digital currency.”

Businesses that persist in using digital currencies are also urged to continue to apply adequate and sufficient measures to prevent them from being used as a tool for money laundering and the channeling of resources towards terrorist activities.

Ponzi Scheme Warnings

Colombia Clarifies Stance on BitcoinThe reason for such a strong position is the prevalence of investment scams in the region. The presence of many Colombian bitcoin-based Ponzi schemes prompted the Superintendency to warn the public about the risks of “bitcoin” and further prohibited banks from dealing with it earlier this year. Bitcoin.com has recently reported that nearby Bolivia has a similar problem with pyramid schemes masquerading as cryptocurrency investments.

In an interview with La.FM last week, Gutiérrez warned that pyramid schemes that use bitcoin to raise money from Colombians could face up to 20 years prison time. He detailed that these schemes have criminal consequences including imprisonment, both for those who organize these businesses and for those who promote them. He added that (loosely translated):

These schemes could have used the names of virtual coins to defraud the people.

What do you think of these clarifications? Let us know in the comments section below.


Images courtesy of Shutterstock, Colombia Central Bank, and El Tiempo


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