Monitoring desk
ISLAMABAD/WASHINGTON: US authorities said that they arrested the boss of China-based cryptocurrency exchange Bitzlato for alleged money laundering, hailing the move as an international “blow to crypto crime ecosystem.”
According to the AFP, the Department of Justice said that Anatoly Legkodymov, a Russian living in Shenzhen, was held in Miami overnight and was due to appear in court during the day.
The Department said that the accused was detained for his role in the allegedly transmitting a total of $700m in illicit funds, and pointing to criminals using exchange as a haven for narcotics trading and the selling stolen financial data.
Court documents, Legkodymov, the founder and majority shareholder of the Hong Kong-registered Bitzlato, marketed itself as requiring minimal identification from users.
Bitzlato’s largest partner for the transactions was Hydra, the anonymous, illicit online marketplace on the “darknet” that was shut down by the United States and German authorities the previous year.
Hydra sold illegal drugs, stolen credit card information, counterfeit currency, and the fake identity documents, masking the identities of those involved using the encryption.
“Dealt an important blow to crypto crime ecosystem”
Deputy Attorney General Lisa Monaco said in Washington that “Department of Justice dealt an important blow to the crypto crime ecosystem,”.
“Overnight, Department worked with key partners here and abroad to disrupt Bitzlato, China-based money laundering engine that fueled a high-tech axis of crypto crime, and to arrest a founder, Russian national Anatoly Legkodymov.”
Monaco said that “actions send the clear message, whether you break our laws from China, Europe and abuse our financial system from a tropical island you can expect to answer for your crimes inside the United States courtroom.”
A secret “darknet” includes websites that can be accessed only with specific software and authorizations, ensuring anonymity for users.
Such the networks have faced increased pressure from international law enforcement after the boom in usage during the coronavirus pandemic.
Attorney for the Eastern District of New York, Breon Peace, said that “As alleged, Bitzlato sold itself to criminals as a no-questions-asked cryptocurrency exchange, and reaped millions of dollars’ worth of deposits as a result,”.
