Wednesday, July 22, 2015

BREAKING: Operators of a Bitcoin Exchange Have Been Arrested for Running an Illegal Exchange

This absolutely amazes me. Shouldn't it be clear by now that the government is not going to tolerate unlicensed Bitcoin operators? It is extremely dangerous to operate directly, in the face of, the government, when it is focused on your type of operation.

Anthony Murgio and Yuri Lebedev, the two operators of the bitcoin exchange service, have been charged by US prosecutors for working without a money transmission license in violation of federal anti-money laundering statutes.

According to the allegations contained in the criminal complaints unsealed today in Manhattan federal court:
Since at least late 2013, Murgio Lebedev and their co-conspirators knowingly operated, a Bitcoin exchange service, in violation of federal anti-money laundering laws and regulations, including those requiring money services businesses like to meet registration and reporting requirements set forth by the United States Treasury Department. 
According to an FBI statement (my highlight):, MURGIO, LEBEDEV, and their co-conspirators enabled their customers to exchange cash for Bitcoins, charging a fee for their service. In doing so, they knowingly exchanged cash for people whom they believed may be engaging in criminal activity. MURGIO and his co-conspirators have also knowingly exchanged cash for Bitcoins for victims of “ransomware” attacks, that is, cyberattacks in which criminals (here, distributors of the ransomware known as “Cryptowall”) electronically block access to a victim’s computer system until a sum of “ransom” money, typically in Bitcoins, is paid to them. 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.
In total, between approximately October 2013 and January 2015, exchanged at least $1.8 million for Bitcoins on behalf of tens of thousands of customers. In addition, in the course of the scheme, 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 furtherance of the operations of his unlawful business.

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