Every member of the Cryptocurrency community would like to see the number of exchanges increase. This is because they actually act as banks, if I may say, when comparing Cryptocurrencies to fiat currencies. A user deposits money to his own account in the exchange in currencies supported by the exchange. He is then able to trade with other users of the exchange and is free to withdraw that money. The advantage of these exchanges is that they are really fast as compared to normal banks and that you don’t have to worry about losing your money, just because somebody somewhere is sleeping on the job. Not unless the exchange itself decided to commit fraud, which is a very unfortunate thing.
On July 2015, Bitcoin exchange service Coin.mx and two of its operators were charged by US prosecutors for working without a money transmission license. The two persons — Anthony Murgio and Yuri Lebedev — were accused of operating Coin.mx in violation of federal anti-money statutes by the US Attorney’s Office of the Southern District of New York. At that time, both Murgio and Yuri were charged with conspiracy to operate an unlicensed money transmitting business and operating an unlicensed money transmitting business. The FBI also accused them of knowingly handling funds tied to Bitcoin ransomware attacks. The Federal prosecutors further alleged that the two had unlawfully transmitted hundreds of thousands of dollars overseas. Murgio later posted a $100,000 bail.
Four months later, in November that year, US prosecutors unsealed new charges against Anthony Murgio. Murgio was accused of miscoding credit card transactions so as to hide the fact that Bitcoins were being purchased. Murgio and his co-conspirators were also accused of knowingly instructing Coin.mx customers to lie to their banks about Bitcoin exchange transactions the customers were executing with Coin.mx. In a twist of events, Murgio pleaded guilty to charges related to Coin.mx in January and is scheduled to be sentenced on June 16 this year.
Fast forward and on Friday Mar 17, a Manhattan court sided with the prosecution in convicting one of Coin.mx operators, Yuri Lebedev, and another person named Pastor Trevon Gross. Both men were convicted of bribery and consiperacy charges, but Lebedev was also convicted of wire fraud and bank fraud. The defendants, however, are not planning to take this lightly. Gross’s lawyer — Henry Klingeman — said he would be seeking an order to overturn the verdict. Prosecutors argued that Lebedev helped to organize bribes. In exchange, the prosecutors argued that Gross helped Anthony Murgio take over a small credit union Gross ran from his church.
Murgio on the other hand used that credit union to escape scrutiny of banks that were not comfortable with processing payments that involved Bitcoin. In their defense, lawyers from both defendants tried to no avail to paint a different picture. They tried to argue that both of them had no knowledge that Murgio was running an illegal operation and they never acted with corrupt intent.
Such actions should not be tolerated because they are tainting the good name of Cryptocurrency.