The United States Treasury Department and Department of Justice (DOJ) today announced that they have arrested the founder and majority owner of crypto exchange Bitzlato and have shut down the exchange.
Crypto exchange Bitzlato Limited, has been designated as a primary money-laundering concern by U.S. authorities and has arrested its founder, Anatoly Legkodymov. Legkodymov has been charged for allegedly facilitating money laundering for criminals. According to The Wall Street Journal, the Treasury Department designated Bitzlato under a section of the USA Patriot Act, a law aimed at combating money laundering and terrorist financing, for allegedly laundering illicit funds for Russian-based ransomware actors.
According to the DOJ, The Hong Kong-based exchange operates globally and has allegedly exchanged more than $700 million in cryptocurrency with Hydra Market, a darknet marketplace that was shut down in 2022. The DOJ added that Bitzlato received more than $15 million of ransomware proceeds.
U.S Attorney Breon Peace commented:
Institutions that trade in cryptocurrency are not above the law and their owners are not beyond our reach. As alleged, Bitzlato sold itself to criminals as a no-questions-asked cryptocurrency exchange, and reaped hundreds of millions of dollars’ worth of deposits as a result. The defendant is now paying the price for the malign role that his company played in the cryptocurrency ecosystem.
Deputy Attorney General Lisa Monaco said:
Today the Department of Justice dealt a significant blow to the cryptocrime ecosystem. Adding, “Today’s actions send the clear message: Whether you break our laws from China or Europe—or abuse our financial system from a tropical island—you can expect to answer for your crimes inside a United States courtroom.”
Legkodymov, the founder and majority owner of the exchange, was arrested on Tuesday evening in Miami, Florida, and is a 40-year-old Russian national living in Shenzhen, China. Legkodymov is scheduled to appear in a federal court in Miami on Wednesday.
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