In a “major international cryptocurrency enforcement action,” the US Department of Justice has announced the arrest of Bitzlato’s founder, Anatoly Legkodymov.
U.S. Deputy Attorney General Lisa Monaco announced on January 18 that the United States and France had seized the website of Bitzlato and labeled the company a “major money laundering concern” related to illegal Russian funding. According to Monaco, U.S. authorities took action against Bitzlato for “conducting a money transmitting business that transported and transmitted illicit funds and that failed to meet U.S. regulatory safeguards.” This was a joint effort between the Justice Department, the Treasury Department, and the French authorities.
Legkodymov, a Russian national living in China, was arrested by FBI authorities on January 17 in Miami as part of the case against Bitzlato. The United States District Court for the Southern District of Florida will hear his arraignment.
International Cryptocurrency Enforcement Action: DOJ crypto enforcement explained
According to the criminal complaint filed by U.S. authorities, Bitzlato was considered a “crucial financial resource” for the Hydra darknet marketplace because it allowed users to launder payments, including those obtained from ransomware attacks.
Many of Bitzlato’s assets, including the company’s servers, and the founder, were seized in a concerted enforcement campaign across Europe and the United States. After the National Cryptocurrency Enforcement Team was established in October 2021, Monaco called this case the “most major enforcement endeavor” against an exchange.
U.S. Department of Justice criminal division assistant attorney general Kenneth Polite stated that the government was “just getting started” in its crackdown on businesses that aided in money laundering. Monaco warned against people who conduct crimes against the U.S. financial system “from a tropical island,” but did not specifically address the ongoing case against cryptocurrency exchange FTX and its former CEO, Sam Bankman-Fried.