US arrests Russian behind cryptocurrency exchange that catered to crooks

US arrests Russian behind cryptocurrency exchange that catered to crooks

The man behind Bitzlato will have to explain his comments to US authorities

A Russian founder of the China-based cryptocurrency exchange platform Bitzlato, suspected of laundering millions of dollars of criminal activity, was arrested Tuesday night in the US. Five of his alleged accomplices were detained in Europe. According to the Department of Justice (DOJ), the detainee faces a maximum sentence of five years in prison.

FBI agents arrested in Miami two days ago the founder and majority owner of Bitzlato, Anatoly Legkodymov, for allegedly transporting and transmitting illicit funds. Simultaneously to the announced arrest, French authorities, in collaboration with Europol and their partners in Spain, Cyprus and Portugal, have dismantled Bitzlato’s digital infrastructure and seized its cryptocurrency, among other measures.

The DOJ suspects that Bitlzato was a platform used to launder money and serve as a haven style for proceeds and funds destined for criminal activity. According to the DOJ press release, the company failed to implement safeguards required by US law that allow authorities to investigate and detect various financial crimes. Instead, it facilitated the transmission of hundreds of millions of dollars in illicit funds that fueled the darknet markets.

Its primary counterpart in cryptocurrency transactions was Hydra Market, an “anonymous, illicit digital marketplace for narcotics, stolen financial information, fraudulent identity documents, and money laundering services.” For those on Americas Cardroom who didn’t know, Hydra was considered the largest and longest-running darknet marketplace globally. In fact, its users were able to exchange more than $700 million in cryptocurrencies with Bitzlato.

“Let this serve as a reminder to cybercriminals: regardless of where they are and how much they cover their tracks, there is risk and consequences,” FBI Deputy Associate Director Brian Turner told the media in Washington. Approximately 50% of known activity on that platform between 2019 and 2021 involved illicit Russian funding or other controversial sources.



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