Last Updated on December 7, 2023 by Bitfinsider
Anatoly Legkodymov, a co-founder of Hong Kong-based crypto exchange Bitzlato, pleaded guilty Wednesday to running an unlicensed money transmitter in connection with charges that the exchange processed proceeds from ransomware attacks, illicit drug trafficking, and other crimes.
Legkodymov, the exchange’s principal owner, “agreed to dissolve Bitzlato” and drop claims on $23 million in confiscated assets, according to a press release from the US Department of Justice (DOJ). The US government sanctioned Bitzlato in January, alleging that it laundered $700 million in funds. Treasury’s Financial Crimes Enforcement Network designated the exchange as a “primary money-laundering concern,” effectively blocking it from the global financial system.
Legkodymov was arrested in Florida, but his case has subsequently been transferred to the United States District Court for the Eastern District of New York.
Europol, the European Union’s police agency, later claimed that Bitzlato laundered almost $1 billion in money. According to the DOJ, the major counterparty of the little-known exchange was darknet marketplace Hydra, which allowed trades for fraudulent ID information, stolen bank information, and money laundering.
Bitzlato, according to Deputy Attorney General Lisa Monaco, is a “safe haven for fraudsters, thieves, and other criminals.”
“We are dismantling and disrupting the cryptocrime ecosystem using all tools available – including criminal prosecution,” she went on to say. “In January, the department and our partners seized Bitzlato’s infrastructure and cryptocurrency.” The conviction of Bitzlato’s founder today is the most recent result of our work.”
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