Feds Bust Coin.mx Underground Bitcoin Exchange | PYMNTS.com

It seems like every time bitcoin takes a step forward in shaking off its somewhat nefarious roots, someone pops up to ruin it.

In this case, there’s actually two someones.  

The U.S. Justice Department announced earlier this week (July 21) that it had charged two Florida men, Anthony Murgio and Yuri Lebedev, for illegally operating an underground bitcoin exchange. The unlicensed online bitcoin exchange allegedly was used to help “tens of thousands of clients” misdirect roughly $2 million worth of the digital currency. 

The federal complaint alleges that Murgio and Lebedev aided cybercriminals in conducting illegal activity in connection with the illegally-ran bitcoin exchange Coin.mx. 

Here’s how the case went down, according to the Feds: 

The co-conspirators, as they are being referenced, have operated the exchange since at least late 2013. The service operated in violation of federal anti-money laundering laws and enabled their customers to exchange cash for bitcoins.

“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,” the complaint reads. “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.”

What this means is that Murgio and Lebedev are accused of enabling the transactions for hackers that would prey on people to pay ransom to gain access back to those devices. Those hackers allegedly received payments in bitcoin, which was converted into cash through the bitcoin exchange. 

While Murgio and Lebedev didn’t conduct the crimes themselves, the

Originally appeared at: http://www.pymnts.com/exclusive-series/2015/underground-bitcoin-exchange-busted-and-the-ebola-of-banking/