Anthony Murgio, the operator of Bitcoin exchange Coin.mx, pled guilty this week to one count each of conspiracy to operate an unlicensed money transmitting business, conspiracy to commit bank fraud, and conspiracy to obstruct an examination of a financial institution. If convicted, he could face up to 30 years in prison.
The announcement of the plea came from US Attorney for the Southern District of New York Preet Bharara. Once up for consideration for US Attorney General, Bharara has a tough reputation for taking plenty of prisoners when it comes to prosecuting criminal enterprises.
Coin.mx was operational between 2013 and 2015, before it was shut down by the FBI, following a joint investigation with the US Secret Service. A federal indictment accuses the operators of knowingly facilitating the exchange cash for Bitcoins by criminal groups.
Transactions related to cases of computer hacking, securities and wire fraud, identity theft, illegal internet gambling, and money laundering were all processed by the site, claim prosecutors. Coin.mx also allegedly helped victims of ransomware attacks transfer cash into the digital currency, without reporting the suspicious transactions to authorities.
JPMorgan Hack Attack
Murgio is accused of going to great lengths to conceal the operation from authorities, hiding the business behind several fake fronts, including one called “Collectables Club.” This was an attempt to fool financial institutions into believing it was an online club for stamp collectors and hobbyists.
While Murgio ran the show, with the help of co-defendant Yuri Lebodev, prosecutors believe the site was actually owned by Gery Shalon, an Israeli accused of being the mastermind behind a massive cyber-attack on JPMorgan in the summer of 2014. That hack resulted in the largest-ever theft of customer data from a US financial institution, affecting some 83 million customers, including both individual accounts and those of small businesses.
Shalon was extradited from Israel to the US last year. Along with two others, he is alleged to have operated a criminal enterprise that also involved with pumping up stock prices with sham promotional emails, running illegal online casinos, and laundering money through at least 75 shell companies around the world.
$10 Million in Illegal Bitcoin Transactions
It’s unclear how well Murgio knew Shalon, and he is not believed to have had direct involvement in the JPMorgan attack. But his former school friend Joshua Aaron is accused of being a member of Shalon’s hacking group. Aaron was arrested in Russia in October and turned up in the US in December to face trial.
“Anthony Murgio took a new-age approach to an age-old crime of fraud. As he admitted in his guilty plea today, Murgio used Coin.mx, an internet-based Bitcoin exchange, to process over $10 million in Bitcoin transactions in violation of federal anti-money laundering laws, and then obstructed a regulatory examination to hide his scheme,” Bharara said in an issued presser on Monday on the matter.
Murgio will be sentenced on January 27.