The Founder of Cryptocurrency Exchange Bitzlato Has Been Charged With $700 Million in Financial Fraud

Published on:

Last Updated on January 19, 2023 by Bitfinsider

On Wednesday, federal authorities reported the arrest of a Russian national who ran a cryptocurrency exchange that became a haven for the proceeds of unlawful activity.

Authorities in the United States have arrested Anatoly Legkodymov, a 40-year-old Chinese resident, on suspicion of laundering hundreds of millions of dollars through his Hong Kong-registered crypto trading platform, Bitzlato.

Bitzlato was taken offline by the DOJ on Wednesday as part of a “international cryptocurrency enforcement action.”

The arrest, according to Lisa Monaco, deputy attorney general, is a “huge blow to the crypto criminal ecosystem.”

The DOJ said that Bitzlato traded more than $700 million in cryptocurrency with users of Hydra Market, a darknet marketplace for drugs, fake IDs, and other illegal items, either directly or through third-party conduits.

In April of last year, the DOJ and German law enforcement began action against Hydra Market, culminating in its closure.

Legkodymov is also accused of carrying out Bitzlato transactions from Miami between 2022 and this year, as well as receiving reports of “substantial traffic” to its website from IP addresses in the US. This includes more than 250 million visitors in July 2022, according to the DOJ.

According to Reuters, Bitzlato’s website was replaced on Wednesday with a notice saying the service had been terminated by French authorities.

Prior to Wednesday’s action, Bitzlato was a little-known cryptocurrency firm that has processed around $4.5 billion in bitcoin transactions since 2018.

Customers were notified that withdrawals would be suspended permanently, and they were asked to refrain from transferring money to the site until the problem was resolved.

Hardware wallets are safe and secure devices that can be used offline. They keep your cryptocurrency offline, making it impossible for you to be hacked. To find out more on the leading hardware wallets, you may view our reviews here: Ledger & Trezor
Disclaimer: Above are some affiliate links and we may collect a share of sales or other compensation from the links on this page.
Disclaimer: The views and opinions expressed by the author, or any people mentioned in this article, are for informational purposes only, and they do not constitute financial, investment, legal, tax or other advice. Investing in or trading cryptocurrency or stocks comes with a risk of financial loss.