Yuri Lebedev of Florida was sentenced to 16 months in prison on Friday for aiding and abetting Coin.mx, an illegal cryptocurrency exchange, in evading banks and regulators. According to a Reuters report, Lebedev was initially put on trial in February of this year, along with pastor Trevon Gross, who ran a credit union out of his New Jersey church that was involved in the crime.
During its time of operation, Coin.mx ran as the so-called ‘Collectible’s Club’, a title that temporarily allowed the exchange to obscure its activities from the eyes of the law.
When Lebedev was originally convicted in March, his lawyer claimed that he was “in the wrong place at the wrong time with the wrong people”. However, Assistant U.S. Attorney Won Shin asserted that Lebedev and his co-conspirators “had a simple, shared purpose… to make money.”
They did make money. Lebedev assisted in routing bribes to Gross – among them were US$150,000 in donations to Gross’s church. In exchange for the money, Gross assisted a third party, Anthony Murgio, in the takeover of his church’s credit union. The credit union was used to “legitimize” large payments that were made with cryptocurrency, making them less suspicious to legal officials. Murgio pled guilty in January of this year, and was sentenced to five and a half years in prison.
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Coin.mx Linked to Wide-Spread Cyber Attacks
Coin.mx has also been linked to a wider ring of cyber attacks, including the hacking of JPMorgan in 2014. All told, the attacks resulted in the theft of personal data from roughly 100 million people. These attacks involved the owner of Coin.mx, Gary Shalon, along with Maryland native Joshua Samuel Aaron and Israeli Ziv Orenstein. The current state of the cryptocurrency industry as well as any potential vulnerabilities seen across exchanges will be touched on at length at the 2017 Finance Magnates London Summit this November.
Shalon, Aaron, and Orenstein’s illegal activities were widespread, and included running illegal online casinos and Bitcoin exchanges, crypto market manipulation, and the laundering of money through more than seventy-five shell companies.
Neither Lebedev, Gross, nor Murgio (of the Collectible’s Club scam) were indicted for Coin.mx’s involvement in these other various illegal activities. Rather, the exchange’s owner, Gary Shalon of Israel, was sentenced to pay a US$403 million settlement for his involvement in the hacking along with a term in federal prison.
Whether the Collectible’s Club three were just three vulnerable people caught up in a whirlwind of criminal activity or three criminals who sought to make a quick buck at the expense of others is unclear. One thing is clear, however: the crackdown on crypto scams has begun.