The Department of Justice (DoJ) has announced that Anatoly Legkodimo, the founder of Russian cryptocurrency exchange Bitzlato, has been arrested in Miami for running an illegal operation.
The report alleges that Bitzlato carried out a huge amount of crypto criminal activity. US Attorney Brion Peace commented on Legcodimo’s capture. Stating that “entities dealing in cryptocurrencies are not above the law and their owners are not beyond our reach.”
Through the work of a foreign investigative team, combined with local resources in the United States, a Chinese-based money laundering operation that carried out a range of criminal activities was not beyond the reach of the Justice Department. Deputy Attorney General Monaco said: “Today’s actions send a clear message: whether you break our laws from China or Europe or abuse our financial system from a tropical island – you will be able to bring justice to your crimes inside a United States courtroom.” can be expected to answer for.”
Bitzlato is a leading exchange for crypto crime
Legcodimo reportedly operates Bitzlato as one of the largest crypto crime exchanges. The exchange was primarily used to help criminals launder cryptocurrencies from ransomware attacks and move money from drug trafficking. A Hong Kong-registered exchange requires minimal identification from users. No Know Your Customer (KYC) is required to trade on the exchange.
The lack of KYC from the exchange allowed criminals to access the exchange without revealing their identity. Legcodimo has previously acknowledged on the exchange’s chat service that users often use assumed identities. The founder also commented that Bitzlato catered to “known rogues”.
Darknet marketplace leverages Bitzlato
One of the biggest users of Bitzlato was the darknet marketplace, Hydra Market. The anonymous market provides criminals with the ability to buy drugs. Other services include assistance with fraudulent identification documents, and stolen financial information, as well as money laundering services.
The DoJ reports that $700 million in cryptocurrency is said to have made its way directly or indirectly through Bitzlato. An additional $15 million in ransomware proceeds also made its way through the shady exchange. Hydra Markets was shut down by US and German law enforcement in April 2022.
The shameless criminal enterprise even cited a company spreadsheet that claimed one of its positives as offering KYC, while one of the negatives was dirty money.
In addition, Bitzlato’s infrastructure was dismantled along with additional enforcement action by a global team including Europol and several countries.
disclaimer
BeInCrypto has reached out to the company or individual involved in the story for an official statement regarding the recent developments, but has not yet received a response.