US authorities are pursuing Bitzlato’s creator
Crypto company Bitzlato was the target of a “significant worldwide cryptocurrency enforcement operation” announced by the US Department of Justice. The action also resulted in the arrest of the company’s creator, Anatoly Legkodymov.
Lisa Monaco, the Deputy Attorney General of the United States, made an announcement on January 18 that enforcement action had been taken against Bizlato in coordination with France. These actions included the seizure of Bizlato’s website and the labeling of the company as a “primary money laundering concern” linked to Russian illicit finance.
According to Monaco, the United States Department of Justice, the United States Treasury Department, and French law enforcement cooperated to bring legal action against Bitzlato for allegedly “operating a money transfer business that transported and transferred illicit funds and that failed to meet United States regulatory safeguards.” In other words, Bitzlato allegedly moved and transferred illegal funds.
Legkodymov, a Russian citizen residing in China, was taken into custody by FBI agents on January 17 in Miami as part of the investigation into Bitzlato’s activities.
It is the United States District Court for the Southern District of Florida where his trial will take place.
The US authorities stated that the criminal complaint against Bitzlato was based on the company being a “crucial financial resource” for the money laundering operation of the Hydra darknet marketplace, which allowed users to launder funds, including those obtained from ransomware attacks: “Hydra Market users exchanged more than $700 million in cryptocurrency with Bitzlato, either directly or through intermediaries, until Hydra Market was shut down by US and German law enforcement in April 2022.
In addition, Bitzlato was given more than $15 million from the proceeds of the malware.”
The enforcement action consisted of a concerted effort across Europe and the United States to confiscate a significant portion of Bitzlato’s resources, including the company’s servers, as well as take the company’s creator into custody.
The “most significant enforcement effort” against an exchange since the National Cryptocurrency Enforcement Team was created in October 2021, according to Monaco, which referred to the case as “the most significant enforcement effort.”
It was stated by Assistant Attorney General Kenneth Polite of the Criminal Division of the Department of Justice that US authorities were “just beginning” to crack down on similar businesses engaged in facilitating money laundering.
Monaco issued a warning to individuals committing crimes against the US financial system “from a tropical island,” despite no official commenting explicitly on the ongoing prosecution of cryptocurrency exchange FTX and its former CEO Sam Bankman-Fried.
