Illegal bitcoin exchange Coin.mx busted in NYC

[elvizzzzzzz]

http://finance.yahoo.com/news/three-indicted-u-over-major-144238269.html

"Prosecutors said Shalon and Orenstein also ran payment processors IDPay and Todur, through which they collected $18 million of fees to process hundreds of millions of dollars of transactions for criminals.

Shalon was also accused of running the illegal bitcoin exchange Coin.mx with Murgio, and concealing at least $100 million in Swiss and other accounts."

[unamis76]

The question now is.. Did they have a BitLicense?

[mayax]

The question now is.. Did they have a BitLicense?

Of course not because they are not based in NY.

Florida does require a Money Transmitter license for any Bitcoin exchange. A such license is very expensive(over 500K) and I don't think it's worth it based on the BTC tradings that a company can get these days.

Don't be fooled by the bots you see in actions on any exchanger platform.I am talking about real transactions. It's hard to maintain a licensed company. You need staff (employees) and the salaries are not low in USA.

Example: you need a compliance officer.

A salary for a such position is around of 3000-4000 usd/month without taxes which are not small at all.

You need a collaboration with lawyer. This should be around of 1000-3000 per month(depends on lawyer). you need yearly audit. the cost is around of 10,000 USD or more(depends on how many transactions you have), advertising, common bills (electricity, phones, internet, rent), taxes.

For a small company, a such license is useless.The costs per month can easily reach at 20,000 usd or more. So, first you need to make 20,000 usd and then to think about a net profit for "yourself"(owner).
Very hard to make these money.

Do not look at Coinbase and others like them. They were/are financed by shareholders with millions of USD; otherwise they would be bankrupted.

[Kprawn]

The question now is.. Did they have a BitLicense?

Gemini also bypassed the BitLicense process with Gemini Trust Company, LLC regulated as a fiduciary.  .... I can bet you a dollar, Coin.mx did neither. You cannot get away

with this kind of thing, there are just to many other competitors out there paying these license fees, who will expose you. They will squash you like a bug.   

https://www.cryptocoinsnews.com/gemini-bitcoin-exchange-launches-needs-no-bitlicense-fincen/

[unamis76]

The question now is.. Did they have a BitLicense?

Of course not because they are not based in NY.

Florida does require a Money Transmitter license for any Bitcoin exchange. A such license is very expensive(over 500K) and I don't think it's worth it based on the BTC tradings that a company can get these days.

Don't be fooled by the bots you see in actions on any exchanger platform.I am talking about real transactions. It's hard to maintain a licensed company. You need staff (employees) and the salaries are not low in USA.

Example: you need a compliance officer.

A salary for a such position is around of 3000-4000 usd/month without taxes which are not small at all.

You need a collaboration with lawyer. This should be around of 1000-3000 per month(depends on lawyer). you need yearly audit. the cost is around of 10,000 USD or more(depends on how many transactions you have), advertising, common bills (electricity, phones, internet, rent), taxes.

For a small company, a such license is useless.The costs per month can easily reach at 20,000 usd or more. So, first you need to make 20,000 usd and then to think about a net profit for "yourself"(owner).
Very hard to make these money.

Do not look at Coinbase and others like them. They were/are financed by shareholders with millions of USD; otherwise they would be bankrupted.

My post was ironic, but I was actually thought they were based in NYC and were operating illegally Even if you're not based in NYC, to operate there you have to have a BitLicense... Am I wrong?

And thanks for the insight on the money one has to spend to maintain this... Didn't know it was this much. I guess that's where there is only a handful of nice exchanges and only a few having a BitLicense.

The question now is.. Did they have a BitLicense?

Gemini also bypassed the BitLicense process with Gemini Trust Company, LLC regulated as a fiduciary.  .... I can bet you a dollar, Coin.mx did neither. You cannot get away with this kind of thing, there are just to many other competitors out there paying these license fees, who will expose you. They will squash you like a bug.   

https://www.cryptocoinsnews.com/gemini-bitcoin-exchange-launches-needs-no-bitlicense-fincen/

I guess there's ways to make everything happen... And the market is fierce, nobody wants trading fees to be "distributed" across exchanges. Everyone wants the big share of the cake

[ShetKid]

18 million of fees from a paymenbt processing site not many have heard of sort of sounds fake. Why would criminals use them when they have something like bitcoin in the first place e

[bieberluvr]

They were scammy anyway...  If the BTC price was listed on google as $100, it'd be listed on their website as $110.  Then the fees too...  I only used them because I could buy instantly with my credit card.  I was willing to pay their inflated price for the convenience of getting it instantly.  I recently discovered a BTC atm in my city, so now I don't have to worry about that retardedness of buying online...

[European Central Bank]

18 million out of hundreds of millions doesn't sound like a very good deal if it's criminal money. I'd be wanting more for money laundering.

[ShetKid]

They were scammy anyway...  If the BTC price was listed on google as $100, it'd be listed on their website as $110.  Then the fees too...  I only used them because I could buy instantly with my credit card.  I was willing to pay their inflated price for the convenience of getting it instantly.  I recently discovered a BTC atm in my city, so now I don't have to worry about that retardedness of buying online...

That doesn't always indicate scammy behavior . A lot of other sites have price difference with respect to google. Most of the sites have its own traders so price vary independently. However mostly its close and with 5 dollars.

[defaultking]

The question now is.. Did they have a BitLicense?

Of course not because they are not based in NY.

Florida does require a Money Transmitter license for any Bitcoin exchange. A such license is very expensive(over 500K) and I don't think it's worth it based on the BTC tradings that a company can get these days.

Don't be fooled by the bots you see in actions on any exchanger platform.I am talking about real transactions. It's hard to maintain a licensed company. You need staff (employees) and the salaries are not low in USA.

Example: you need a compliance officer.

A salary for a such position is around of 3000-4000 usd/month without taxes which are not small at all.

You need a collaboration with lawyer. This should be around of 1000-3000 per month(depends on lawyer). you need yearly audit. the cost is around of 10,000 USD or more(depends on how many transactions you have), advertising, common bills (electricity, phones, internet, rent), taxes.

For a small company, a such license is useless.The costs per month can easily reach at 20,000 usd or more. So, first you need to make 20,000 usd and then to think about a net profit for "yourself"(owner).
Very hard to make these money.

Do not look at Coinbase and others like them. They were/are financed by shareholders with millions of USD; otherwise they would be bankrupted.

I think this is the reason that Bitcoin will need to go mainstream in developing nations before it ever goes mainstream here in the US. Too many regulations will prevent bitcoin from being as successful as it could be. While regulations do help in some cases, it hurts the little guy way more than it helps and makes improvements slow to happen.

[silverleafy]

Actually, I think Coin.mx was shut down not for helping criminals (that just seems to be something the media says every time something involves Bitcoin; all bitcoiners are criminals apparently  ) but rather they didn't have the licensing to be transmitting such large amounts of money. Of course, some of that money may have come from criminal activity, but they were not charged for being accomplices in helping criminal activity since they would have no way of knowing whether the money they were exchanging was from illegal activity or not.

They were also based in Florida AFAIK.

Here is an article from Coindesk about the arrests and shut down.

[XCASH]

18 million of fees from a paymenbt processing site not many have heard of sort of sounds fake. Why would criminals use them when they have something like bitcoin in the first place e

What use are Bitcoins to criminals if they can't turn them into fiat? There's a limit to what you can buy with Bitcoins. Criminals need payment processors to convert their Bitcoins to fiat, but I admit I had not heard much about Coin.mx until they got busted. I never thought it dealt with such large sums of money to obtain 18 million in fees. I doubt many of the major exchanges earn that much in a year.

[ivanst776]

Bad story, but how much was the percentage fee in this exchange, 18$ million on fees seems very high, do other exchanges earn like this?

[DuddlyDoRight]

Hey at least they didn't just disappear with millions in cold-storage like most big cash-flow entities in BTC people like to NOT talk about..

Whatever you do don't suggest some form of central transparent crediting authority.. People just dismiss it as government intrusion.. Go figure..

[Mickeyb]

Isn't this like an old news? Weren't they shut down few months ago already? Or this is just a follow up? I don't get it!

[DuddlyDoRight]

Isn't this like an old news? Weren't they shut down few months ago already? Or this is just a follow up? I don't get it!

It's ONLY millions of dollars and malicious behavior against the country the money comes from.. Just like it was ONLY millions of dollars from honest investors when all those owners took off with cold storage..

QUICK sweep it under the rug!!!

[silverleafy]

Isn't this like an old news? Weren't they shut down few months ago already? Or this is just a follow up? I don't get it!

It's ONLY millions of dollars and malicious behavior against the country the money comes from..

Please explain how it was malicious behavior. How is not registering with the central government malicious behavior? Sure they were unlicensed, but they weren't stealing money from people, they were just provided a service. It was not malicious at all, just unlicensed so of course the government doesn't like it.

[XCASH]

Isn't this like an old news? Weren't they shut down few months ago already? Or this is just a follow up? I don't get it!

There are new charges made against the owners of Coin.mx now. That Coindesk link posted earlier was to a story written on July 21, 2015. However, there is a new Coindesk story about the new charges written today. They are now getting charged with hacking banks and laundering money through their exchange. They were already charged with being an illegal payment processor and running an illegal exchange.

http://www.coindesk.com/us-prosecutors-unseal-new-charges-against-bitcoin-exchange-operator/

The new charges, which according to the US Attorney’s Office were filed as a result of its continuing investigation, come in tandem with charges against three other individuals: Gery Shalon, Joshua Aaron and Ziv Orenstein.

The three stand accused of money laundering, computer hacking and securities fraud charges. Coin.mx, according to the US government, was used as a vehicle for laundering illicit funds.

In addition to being accused of aiding the unlicensed operation of Coin.mx, the three allegedly orchestrated a web of digital criminal activity dating back to 2012 that involved a cyberattack on JPMorgan Chase in 2014, as well as attacks against other financial institutions.

The indictment alleges a global infrastructure of crime, including illicit gambling sites, money laundering channels and the theft of data from at least a hundred million individuals over a multi-year period.

[mayax]

The BTC industry is full of such cases. 90% or more is black market. There is no news in this

[USB-S]

$18 million in fees, they must have had clients with pretty big pockets. Dealing with bitcoins has its risks. people should definitely check if it's legal before they do things like this. But I guess being legal wasn't their main concerns.