US Charges Bitzlato Founder with Processing $700M in Crypto for Criminals

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US Charges Bitzlato Founder with Processing $700M in Crypto for Criminals

<p>The United States Department of Justice (DOJ) has charged Anatoly
Legkodymov, the Founder of China-based cryptocurrency exchange, Bitzlato, with processing over $700 million of illicit funds in cryptocurrency for darknet criminals between
2018 and 2022. </p><p>The DOJ disclosed on Wednesday that Legkodymov, a 40-year-old n
national who resided in China, was arrested on Tuesday night in Miami by agents
of the Federal Bureau of Investigation. Additionally, the <a href="https://www.financemagnates.com/tag/department-of-justice/" target="_blank" rel="follow">federal executive department</a> accused Legkodymov, who is the majority owner of the Hong Kong-registered
crypto exchange, of operating an unlicensed money-transmitting business in the
country.</p><p>The Justice Department noted that the founder ran the exchange from Miami
in 2022 and 2023, adding that the platform "did substantial business" with customers in the United States. Moreover, the crypto exchange generated high internet traffic from
the United States, gaining as much as over 250 million visits in July last
year.</p><p>The department noted that Legkodymov was scheduled to be arraigned before
a  Florida court on Wednesday and could spend up to five years in prison if found guilty.</p><p>Watch the recent FMLS22 session on the future of cryptocurrencies.</p><p>DOJ Accuses Bitzlato of Working with Hydra Market Criminals</p><p>According to the DOJ, Bitzlato operated with a weak <a href="https://www.financemagnates.com/terms/k/know-your-customer-kyc/" class="terms__main-term" id="efaf9032-afc0-45c1-b452-1f3796cbbd3d" target="_blank">know-your-customer (KYC</a>)
procedures and marketed its platform as a "no-questions-asked" crypto exchange to
criminals, generating "hundreds of millions of dollars' worth of deposits as a
result."</p><p>"Bitzlato's largest counterparty in cryptocurrency transactions was
Hydra Market (Hydra), an anonymous, illicit online marketplace for narcotics,
stolen financial information, fraudulent identification documents, and <a href="https://www.financemagnates.com/tag/money-laundering/" target="_blank" rel="follow">money
laundering services</a> that was the largest and longest running darknet market in
the world," the DOJ said.</p><p>Furthermore, the department noted that Bitzlato processed over $700 million in
cryptocurrency for Hydra users until the -based darknet marketplace's
operation <a href="https://www.financemagnates.com/cryptocurrency/news/us-germany-sanction-n-darknet-marketplace-hydra-seize-bitcoins/" target="_blank" rel="follow">was shut down</a> in April last 2022.
The crypto exchange got over $15 million in ransomware proceeds during the period, the DOJ
said. </p><p>Meanwhile, the federal executive department pointed out that the US Department of the Treasury's
Financial Crimes Enforcement Network  is taking simultaneous enforcement actions on the case. In addition, the DOJ said French authorities are working on the case in partnership with <a href="https://www.financemagnates.com/tag/europol/" target="_blank" rel="follow">the European Union Agency for Law Enforcement Cooperation</a> and partners from Portugal, Spain and Cyprus. The authorities have already "dismantled Bitzlato's digital infrastructure, seized [its] cryptocurrency, and took other enforcement actions."</p>

This article was written by Solomon Oladipupo at www.financemagnates.com.

Source: US Charges Bitzlato Founder with Processing $700M in Crypto for Criminals