Bitzlato Ltd. ‘s CEO and the owner was detained for allegedly handling $700 million in illegal payments through the darknet market Hydra Market.
Russian citizen Anatoly Legkodymov, who resides in Shenzhen, China, was scheduled to be arraigned in the Southern District of Florida United States District Court today.
He was the largest shareholder of the cryptocurrency exchange and was taken into custody for allegedly running a business that transported and communicated illicit funds in contravention of American anti-money laundering laws.
He also is detained for operating an unlicensed money-transfer business and may spend up to five years in prison if found guilty.
French authorities and the U.S. The Department of Treasury’s Financial Crimes Enforcement Network implemented enforcement steps simultaneously (FinCEN). More than $15 million in revenue was generated by Bitzlato as well.
Deputy Attorney General Lisa Monaco said in a press conference that the Department of Justice dealt a serious blow to the cryptochrome ecosystem today and that the actions taken today send a loud and clear message: if you break our laws from China or Europe, or misuse our financial system from a tropical island, you can expect to face justice in a U.S. courtroom.
Breon Mir, who is a U.S. The Attorney for the Eastern District of New York, said that Bitzlato advertised itself to criminals as a cryptocurrency exchange that asked no questions and, as a result, collected hundreds of millions of dollars in deposits.
On May 29, 2019, Anatoly told another coworker via Bitzlato’s internal chat system that the exchange’s clients are known to be criminals, registering their accounts using other people’s identification documents.
According to the criminal complaint, Bitzlato reportedly allowed its users to continually use the customer service site to ask for help with Hydra transactions, which Bitzlato often provided. In conversations with Bitzlato, employees admitted to trading under false names.
Anatoly and other Bitzlato executives reportedly knew that the company’s accounts had a high percentage of criminal activity and that many users were registering under pseudonyms.
Also Bitzlato stated it did not accept U.S. consumers, but it did conduct major business with U.S. users. However, Bitzlato’s customer support representatives informed consumers that they might finance their accounts using U.S. banking institutions.