Crypto Platform Bitzlato Charged With Laundering More Than $700 Million of Illicit Money
U.S. authorities designated cryptocurrency exchange Bitzlato Ltd. as a primary money-laundering concern and charged its founder for allegedly facilitating money laundering for criminals.
The Treasury Department designated Bitzlato under a section of the USA Patriot Act, a law used to combat money laundering and terrorist financing, for allegedly laundering illicit funds for ransomware actors based in Russia. This type of action, a rarely used so-called death-knell sanction that cuts off the entity from the U.S. financial system, has been used mainly in the past against banks and other financial institutions and in most cases has forced the financial institution to close.
Bitzlato, which is based in Hong Kong but operates globally, allegedly exchanged more than $700 million in cryptocurrency with Hydra Market, a darknet marketplace that was the largest in the world before it was shut down in April 2022, the U.S. Justice Department said. Bitzlato also received more than $15 million of ransomware proceeds, the Justice Department said.
Anatoly Legkodymov, the founder and majority owner of Bitzlato, was arrested Tuesday night in Miami. Mr. Legkodymov, a 40-year-old Russian national who lives in Shenzhen, China, is scheduled for his first court appearance Wednesday afternoon at a federal court in Miami.
Concurrent with the U.S. action, French authorities have taken their own enforcement steps, including closing Bitzlato’s digital infrastructure and seizing its cryptocurrency.
U.S. prosecutors said Bitzlato lacked effective know-your-customer procedures to check users’ identity as required by U.S. anti-money-laundering laws and did substantial business with U.S.-based customers despite claiming not to accept users from the U.S.
Representatives for Bitzlato and for Mr. Legkodymov couldn’t be immediately reached for comment.
“Today the Department of Justice dealt a significant blow to the cryptocrime ecosystem,” Deputy Attorney General Lisa Monaco said Wednesday. “Today’s actions send the clear message: Whether you break our laws from China or Europe—or abuse our financial system from a tropical island—you can expect to answer for your crimes inside a United States courtroom.”
Write to Mengqi Sun at [email protected]
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
U.S. authorities designated cryptocurrency exchange Bitzlato Ltd. as a primary money-laundering concern and charged its founder for allegedly facilitating money laundering for criminals.
The Treasury Department designated Bitzlato under a section of the USA Patriot Act, a law used to combat money laundering and terrorist financing, for allegedly laundering illicit funds for ransomware actors based in Russia. This type of action, a rarely used so-called death-knell sanction that cuts off the entity from the U.S. financial system, has been used mainly in the past against banks and other financial institutions and in most cases has forced the financial institution to close.
Bitzlato, which is based in Hong Kong but operates globally, allegedly exchanged more than $700 million in cryptocurrency with Hydra Market, a darknet marketplace that was the largest in the world before it was shut down in April 2022, the U.S. Justice Department said. Bitzlato also received more than $15 million of ransomware proceeds, the Justice Department said.
Anatoly Legkodymov, the founder and majority owner of Bitzlato, was arrested Tuesday night in Miami. Mr. Legkodymov, a 40-year-old Russian national who lives in Shenzhen, China, is scheduled for his first court appearance Wednesday afternoon at a federal court in Miami.
Concurrent with the U.S. action, French authorities have taken their own enforcement steps, including closing Bitzlato’s digital infrastructure and seizing its cryptocurrency.
U.S. prosecutors said Bitzlato lacked effective know-your-customer procedures to check users’ identity as required by U.S. anti-money-laundering laws and did substantial business with U.S.-based customers despite claiming not to accept users from the U.S.
Representatives for Bitzlato and for Mr. Legkodymov couldn’t be immediately reached for comment.
“Today the Department of Justice dealt a significant blow to the cryptocrime ecosystem,” Deputy Attorney General Lisa Monaco said Wednesday. “Today’s actions send the clear message: Whether you break our laws from China or Europe—or abuse our financial system from a tropical island—you can expect to answer for your crimes inside a United States courtroom.”
Write to Mengqi Sun at [email protected]
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
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