Bitzlato co-founder charged with laundering over £500m
On 18 January, 2023, US authorities confirmed the arrest of a co-founder and major shareholder of Hong Kong-registered crypto exchange platform Bitzlato for facilitating and harboring money laundering criminals.
A Russian native currently living in China, Anatoly Legkodymov, was arrested in Miami on 17 January, 2022.
He was booked under a section of the US Patriot Act aimed at preventing money laundering and terrorist financing. His charges included operating an unlicensed money exchange business.
Bitzlato is a crypto exchange platform based out of Hong Kong with global operations. The platform allegedly exchanged more than £500 million in cryptocurrency on the Hydra Market. The Hydra Market was the largest darknet marketplace in the world before it was shut down in April 2022. The crypto exchange co-founder also allegedly received £12 million in ransomware proceeds.
Bitzlato labeled primary money-laundering concern
The US FinCEN (Treasury's Financial Crimes Enforcement Network) previously named the crypto giant a "primary money-laundering concern".
This is among the most serious sanctions from the US anti-crime team as it usually works by cutting the target off financially around the globe.
The platform allowed users to sign up and operate by providing little to no personal information, making it a haven for criminals. It also allegedly posted ads on Russian-language sites telling users that they can sign up and start using the site by only providing their email address and nothing else. The company made it exceptionally easy for users to buy crypto for cash for a negligible fee and practically no personal information.
The seizure of Bitzlato does not come as a surprise. US law enforcement has been hard at work because the crypto community has been under a microscope since last year following scandals in the industry. US authorities charged FTX CEO Sam Bankman Fried in 2022 with eight counts of fraud after the exchange filed for bankruptcy.
The operations of the Hong Kong-based exchange platform Bitzlato have been seized until the trial.
Author: Tripti Sarda
Spirituality, cats, and a love for pop culture. You will always find me talking about the mountains.