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The criminal case that sees Anthony Murgio – a Florida man charged with operating an illegal (unlicensed) bitcoin exchange – saw the presiding US federal judge reject a bid from Murgio’s defense that bitcoin did not classify as “funds”, which would deem it exempt from applicable federal laws.

U.S. District Judge Alison Nathan in Manhattan has rejected Anthony Murgio’s claim to dismiss two charges related to his alleged involvement of unlicensed bitcoin exchange Coin.mx. In his bid, Murgio argued that bitcoin wasn’t money and therefore doesn’t fall under the purview of federal law of prohibiting any operation of an unlicensed money transmitting operation.

Murgio was the former operator of now-defunct Florida bitcoin exchange Coin.mx. He was arrested in July 2015 with the FBI pointing to his alleged violation of federal anti-money laundering laws.

However, the judge rejected Murgio’s claim. In quotes reported by Reuters, Nathan ruled:


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Bitcoins are funds within the plain meaning of that term. Bitcoins can be accepted as a payment for goods and services or bought directly from an exchange with a bank account. They therefore function as pecuniary resources and are used as a medium of exchange and a means of payment.

The endorsement of the bitcoin as a currency and a method of payment is unexpected. Even more-so, after an unrelated money laundering case in Florida saw the presiding judge rule that the defendant did not violate the state’s anti-money laundering laws for his part in a bitcoin transaction. In stark contrast to the above ruling that bitcoin qualifies as funds and money, Miami-Dade Circuit Judge Teresa Mary Pooler wrote in her verdict:

The court is not an expert in economics, however, it is very clear, even to someone with limited knowledge in the area, the Bitcoin has a long way to go before it is the equivalent of money.

The lack of clear regulations surrounding bitcoin and digital currencies is most evident here, as bitcoin sees its status that it is not money and that it is money and qualifies for legal tender in two separate rulings within the space of two months.

The JPMorgan Connection

Murgio and the operators of bitcoin exchange Coin.mx came under the FBI’s scanner following the agency’s investigation of the infamous JP Morgan breach, commonly regarded as one of the largest breaches in history.

Charges were filed, accusing Murgio of not acquiring a Money Services Business License for running the exchange, deeming it was in violation of anti-money laundering laws. Furthermore, an allegation against Murgio accused him of creating a “phony front business” called Collectables Club.

Pinning the operation as a money-laundering front, prosecutors then alleged that the bitcoin exchange served as a platform for laundering payments and proceeds related to the hack. In November 2015, Murgio formally plead not guilty for violating anti-money laundering laws, wire fraud and conspiracy.

In April 2016, Michael Murgio, father of Anthony Murgio was arrested for his alleged involvement in bribery surrounding the Coin.mx case and the cybercriminal ring behind the JP Morgan breach.

Meanwhile, Brian Klien, a lawyer for Anthony Murgio disagreed with the judge’s decision, stating:

Anthony Murgio maintains his innocence and looks forward to clearing his name at his upcoming trial.

Images from iStock/TinaFields and Shutterstock.

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Posted by Samburaj Das