Russian national, founder of Bitzlato crypto exchange, arrested for money laundering
Bitzlato allegedly masked proceeds of illegal gambling and drug deals (Photo:happycoin.club)
A Russian national has been charged with money laundering through a cryptocurrency exchange that allegedly masked the proceeds of illegal gambling and drug deals valued at more than $700 million, the Bloomberg news agency reported on Jan. 18.
Anatoly Legkodymov, founder of the crypto exchange Bitzlato, was arrested on Jan. 18 in Miami, Florida, the U.S. Justice Department said at a press conference on Jan. 19
According to Bloomberg, Hong Kong-registered Bitzlato was a “critical financial resource” for the Hydra dark web market, the largest and longest-running such marketplace, Deputy Attorney General Lisa Monaco said at the conference. The dark web traffics in illicit goods and services.
Bitzlato processed illegal funds including millions of dollars in proceeds from ransomware, according to a Justice Department statement. Legkodymov, 40, who lives in Shenzhen, China, and in Russia, posted on an internal chat that Bitzlato users were “known to be crooks,” according to the United States.
Allowing users to open accounts with minimal information, Bitzlato “became a safe haven for criminals,” U.S. attorney Breon Peace said at the conference.
Bitzlato ads posted on Russian-language sites suggest users could open accounts on the exchange without a passport or a photo, using only an email address. The exchange also allowed them to buy crypto with cash, all for fairly low fees.
Bitzlato has facilitated about $1 billion in crypto money laundering since 2019, according to Chainalysis, which specializes in tracking crypto transactions.
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