On June 27, 2017, Anthony Murgio, former operator of the bitcoin exchange Coin.mx, was sentenced to 5 ½ years in prison. In January, he pled guilty to three counts of conspiracy: one to operate an unlicensed money transmitting business, a second to commit bank fraud, and a third conspiracy to obstruct an examination of a financial institution. In total, these charges carried a maximum of 40 years of prison time. While prosecutors recommended 10 to 12 ½ years, Murgio escaped with a surprisingly light sentence.
Prosecutors asserted that Murgio knowingly used Coin.mx to launder millions of dollars in bitcoin that had been extorted by ransomware hackers. Using a bogus company named “Collectables Club,” Murgio opened bank accounts to run Coin.mx. Murgio and his associates directed their customers to mislead banks about the purpose of their transactions (telling the institutions that they were involved in memorabilia trading rather than bitcoin dealings).
In 2014, after making more than $150,000 in illegal bribe payments, Murgio and his co-conspirators assumed control of the Helping Other People Excel Federal Credit Union (HOPE FCU), which was subsequently used for Coin.mx’s banking operations. Murgio and his associates deliberately misrepresented HOPE FCU to the National Credit Union Administration, which later placed the credit union in conservatorship and liquidation.
It’s been a sad and ignominious decline for Murgio, one-time president of the Phi Sigma Kappa chapter at Florida State University. In college, Murgio and his fraternity brothers paid their tuition by writing Google advertisements in shifts. According to Bloomberg, the hustling brothers brought in thousands of dollars per month in commissions (Murgio claimed to have made as much as $800,000 in college).
Described as a “business whiz kid,” Murgio opened 101 Restaurant in Tallahassee, FL, after graduating in 2007. However, Murgio found himself bankrupt within a few years and in litigation against his landlord. In 2013, he was arrested on charges of stealing $111,000 in unreported sales taxes that his businesses had collected, but chalked it up to a paperwork error.
During Tuesday’s sentencing hearing in Manhattan, US District Judge Alison Nathan assessed, "Mr. Murgio led an effort based on ambition and greed.”
Fighting back tears, Murgio voiced his “enormous regret,” saying, "I am wiser today than when the case began, and I am sorry for all the damage I caused to so many people." He continued with, "Believing what I was doing was OK did not make it OK."
In an exclusive statement to ETHNews, Murgio’s attorney, Brian Klein, had this to say:
“The judge dramatically departed from the government's requested sentence of over 10 years of prison time. Although we had hoped for an even lower sentence, we are pleased she made such a dramatic departure, and in so doing, we believe she validated points we raised in our sentencing submission and at the hearing today.”
Assistant US Attorney Eun Choi was much less forgiving, noting how Murgio mistreated ransomware victims. "He exploited their desperation to personally profit from them," said Choi.
A hearing for restitution and forfeiture is set for September 1.