Operator of Illegal Bitcoin Exchange Coin.mx Sentenced to Prison

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Anthony Murgio, 33, of Tampa, Florida, has been sentenced to five and a half years in prison for running a Bitcoin exchange connected to hackers. The exchange was used to launder more than $10 million worth of funds, authorities reported.

Both Murgio and Yuri Lebedev, 39, of St. John’s, Florida, operated Coin.mx through a fraudulent company called “Collectables Club.” According to the U.S. Attorney’s Office for the Southern District of New York, the illegal Bitcoin exchange used the firm’s misleading name to open financial accounts at banks pretending to be a “members-only association of individuals who discussed, bought, and sold collectible items and memorabilia.” Murgio and Lebedev, along with other co-conspirators, violated bank and credit card company rules and regulations by “deliberately misidentifying and miscoding Coin.mx customers’ credit and debit card transactions.”

“Lies conceived and deployed by Murgio permeated every aspect of Coin.mx’s operation, including its use of front companies, like Collectables Club and Currency Enthusiasts, to try to conceal the illicit nature of the operation,” the Department of Justice stated in its sentencing submission.

On January 9, Murgio pled guilty to three counts regarding operating Coin.mx, which processed over $10 million worth of illegal Bitcoin transactions. Murgio ran the Bitcoin exchange between October 2013 and July 2015 for Gery Shalon, 33, an Israeli citizen who was responsible for hacking at least nine companies, including JPMorgan Chase, E-Trade Financial Corporation and Dow Jones. Coin.mx sold bitcoins that came from illegal online transactions, such as victim payments to ransomware attackers who sought to launder the cryptocurrencies clean.

“I screwed up badly and made serious mistakes and misjudgments,” Murgio said, showing remorse, to U.S. District Judge Alison J. Nathan at his sentencing.

Shalon, along with Ziv Orenstein, 42, compromised data on approximately 76 million household customers and 7 million businesses by hacking the nine companies. U.S. officials described their operation as a “diversified criminal conglomerate” responsible for the largest theft of valuable information from a U.S. bank. The compromised data included the names of customers, along with email addresses and phone numbers. Authorities collected evidence stating that Murgio exchanged cash for the bitcoins of Shalon’s criminal gang. Israeli police arrested Shalon and Orenstein in July 2015, and they were extradited to the United States in June 2016. Both are facing serious charges, including aggravated identity theft, wire fraud and money laundering.

“Mr. Murgio led an effort based on ambition and greed,” and constructed on a “pyramid of lies,” Judge Nathan said during the sentencing hearing at the Manhattan federal court.

On March 17, a Manhattan jury found Lebedev and his co-conspirator Trevon Gross, 52, of New Jersey, guilty of charges connected to a bribery scheme in an attempt to hide the illegal activities of Coin.mx from financial institutes and regulators. Both of the defendants are facing a maximum sentence of 30 years in prison. Judge Nathan scheduled the sentencing hearing of Lebedev and Gross for July 20, 2017.

Murgio’s father, Michael Murgio, 66, was also involved in the Coin.mx case. In October, the father plead guilty to “making a false statement to the National Credit Union Administration on behalf of his son.” By making a plea deal, Michael Murgio managed to avoid additional charges in the case, including “conspiracy to make corrupt payments with intent to influence an officer of a financial institution and making corrupt payments.” Judge Nathan sentenced the elder Murgio to one year of probation along with a $12,000 fine.

The FBI arrested both Lebedev and Murgio on July 23, 2015, for “running an unlicensed bitcoin exchange with the goal of helping individuals launder money.”

Despite the prosecution’s request for 10 to 12 years and seven months behind bars, the Manhattan federal court sentenced Murgio to five and a half years in prison. According to Reuters, Judge Nathan considered Murgio’s “generosity to friends and support to his family” and imposed a prison sentence half as long as the prosecutor recommended.

Judge Nathan has scheduled a hearing on September 1 to decide on the amount of fines, forfeiture and restitution Murgio has to pay to the state. The operator of the illegal Bitcoin exchange remains free on bail.

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Ether Price Analysis: Bears Chasing Back a Bullish Price Rally

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Ether Price Analysis

Following a devastating bear market last week, several major market players saw a reversal pattern called a Double Bottom Reversal.  For reference, please check out the previous BTC-USD market analysis where an in-depth description of Double Bottom Reversals is outlined.

ETHUSD Double Bottom.pngFigure 1:  ETH-USD, 4HR Candles, Gemini, Double Bottom Reversal

The buy-back volume seemed very promising on the reversal pattern and it even saw textbook characteristics of a healthy bull rally.  However, if we take a closer look at the market move, we can see something slightly concerning regarding the health of the bull trend.  To gain some insight, let’s examine the finer points of the reversal pattern:

ETHUSD Failed Retracement.pngFigure 2:  ETH-USD, 30Min Candles, Gemini, Failed 100% Retracement

The most immediately concerning aspect of this bull run is the failed test of the 100% Fibonacci Retracement.  Typically, a healthy Double Bottom Reversal that leads to a prolonged bull run will test the 100% retracement value (sometimes several tests are required) and ultimately yield higher values as the volume supports market interest.  However, in our case, not only did this market move see a rejection of the 100% retracement line, but it also continued a trend of decreasing volume.  Decreasing volume shows the declining market interest in these high values, and it doesn’t offer much in the way of support for the bullish trend.

The second concerning element of this bull run is the retracement it is currently seeing:  The market is testing the 61% Fibonacci Retracement values which coincide with a significant level of support for this run (shown in orange).  At the time of this article, this run tested the support level three times and is now moving on to test the 61% value.  These lower values are paired with increasing spikes in sell volume.  

On the higher timescales, the MACD (an indicator of market momentum) still remains on the bullish side but is beginning to head toward bearish values.  The 4-hour MACD has flipped to bearish, and the current market doesn’t show any indication in the near future of slowing its downward climb.

In order to maintain the support at the 61% value, we will need to see an increase in buy volume to stymie the slowly descending trend we are currently witnessing.   In the coming hours/days, if the market fails the test of the 61% line, we can expect the following support levels:

ETHUSD Next supports.pngFigure 3:  ETH-USD, 30Min Candles, GDAX, Expected Support Levels Following 61% Failure

During both the previous bear run and the formation of the Double Bottom Reversal pattern, we saw levels of support/resistance at the 50% retracement values (shown in pink) and the 38% retracement values (shown in green).  A further test of those values will prove crucial if the ETH-USD markets are to remain in this pseudo-bullish trend.  Failure to see a significant increase in volume will undoubtedly lead to another bear market situation.  Given the declining volume throughout this entire reversal, at this moment I’m inclined to lean more toward a bearish outlook in the near future.  Until volume begins to pick up, the market will continue to slowly hemorrhage as market sentiment declines.

Summary:

  1. Double Bottom Reversal failed the test of the 100% retracement from the previous bear trend.

  2. Until a significant increase in volume is seen, the market will most likely continue this descending trend.

Trading and investing in digital assets like bitcoin and ether is highly speculative and comes with many risks. This analysis is for informational purposes and should not be considered investment advice. Statements and financial information on Bitcoin Magazine and BTCMedia related sites do not necessarily reflect the opinion of BTCMedia and should not be construed as an endorsement or recommendation to buy, sell or hold. Past performance is not necessarily indicative of future results.

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