Anatoly Legkodymov, a Russian national, is suspected of running a company that did not adhere to anti-money-laundering regulations and carried transactions of illicit funds, according to the announcement made by the United States Department of Justice regarding his arrest in Miami. Legkodymov is the founder of the cryptocurrency exchange known as Bitzlato Ltd. (Bitzlato).
According to the report, Bitzlato is the subject of concurrent enforcement activities brought against him by the authorities in France as well as the Financial Crimes Enforcement Network (FinCEN) of the United States Department of the Treasury.
Legkodymov is suspected of running an illegal money transfer organization, and if he is proven guilty, he faces a possible maximum term of five years in jail. Following his arrest, he was scheduled to have his arraignment in the United States District Court for the Southern District of Florida on Wednesday.
Concurrently with Bitzlato’s arrest in the United States, the French police, in conjunction with Europol and its allies in Spain, Portugal, and Cyprus, demolished Bitzlato’s digital infrastructure, confiscated Bitzlato’s cryptocurrency holdings, and carried out other enforcement actions.
Allegedly as a result of poor know-your-customer (KYC) protocols, Bitzlato served as a safe haven for the profits of illicit conduct as well as money intended to be used in unlawful behavior. Hydra Market (Hydra) was Bitzlato’s largest counterparty in cryptocurrency transactions. It is the largest and has been operating the longest of any darknet markets in the globe.
In the year leading up to the closure of the Hydra exchange, users of Hydra transacted more than $700 million worth of cryptocurrency with Bitzlato either directly or through intermediaries. Additionally, Bitzlato raked in than $15 million in income through ransomware.
Users of Bitzlato regularly used the customer support site provided by the firm to ask for help with doing transactions with Hydra, which was provided by Bitzlato on a regular basis. During conversations with Bitzlato workers, users also acknowledged to trading under aliases or fictitious names.
Legkodymov and the other management of Bitzlato were also aware of the fact that many of the site’s users had registered using fraudulent information and that Bitzlato’s accounts were plagued with criminal activities. Legkodymov’s knowledge of these facts was similar to that of the other managers.
According to US Deputy Attorney General Lisa Monaco, the action is the “largest substantial enforcement endeavor” against an exchange since the establishment of the National Cryptocurrency Enforcement Team in October 2021.
Compiled by Coinbold
