An arrest has been made in the United States on allegations that the Bitzlato founder processed illicit funds totaling $700 million.
Anatoly Legkodymov, the creator of Bitzlato, was reportedly (1) detained by the FBI on Tuesday evening in Miami on suspicion of engaging in money laundering activities of 700 million dollars.
The United States Department of Justice has more significant intentions to dismantle a money laundering organization that it says "fuelled a high-tech core of crypto crime," and the arrest of Legkodymov is a part of those ambitions.
The arrest of the creator of Bitzlato also comes in the wake of a policing action brought out by the Justice Department.
Allegations Against Bitzlato's Founders
According to the allegations made by the Department of Justice, Legkodymov managed a money-transfer company that did not comply with the anti-money laundering regulations.
Additionally, the federal police department suspects that the founder of Bitzlato was involved in the movement of unlawful funds connected to illegal Russian financing. Legkodymov is a native Russian speaker who spent some time living in China.
Deputy Attorney General Lisa Monaco offered the following explanation at a news conference in response to questions about the arrest of the founder and principal stakeholder of Bitzlato in Miami:
In addition, Monaco said that the capture of Legkodymov would prevent Bitzlato from providing services to criminals with ties to Russia. After Legkodymov's arrest, the platform, which was situated in Hong Kong, was essentially rendered inoperable. Deputy Treasury Secretary Wally Adeyemo addressed this recent development at a press conference, stating that
"listing Bitzlato as a main money laundering issue basically renders the exchange an international pariah."
Reasons for the Arrest
The Department of Justice claims that the obscure company, Bitzlato provided peer-to-peer services and housed the digital wallets of criminals who dealt with unlawful items. During the last several years, this dubious activity encompassed direct and indirect transactions totaling seven hundred million dollars worth of money.
In addition, the prosecution claims that Bitzlato collected almost $15 million in ransomware revenue "even though it is a minor name." Furthermore, the chief operating officer of Solidus Labs, Chen Arad, made it a point to dispel the myth that so-called "minor players" do not pose as important of a danger to information security. He said:
The phrase "little actors are not safe" and "they carry just as much danger as any big-name exchange (or platform) " comes from the phrase "small actors are not safe."
Since May 3, 2018, according to reports, Bitzlato has completed $4.58 billion worth of cryptocurrency transactions while flouting standards that require considerable consumer verification. The prosecution believes that the cryptocurrency exchange intentionally provided its services to consumers in the United States and to exchanges headquartered in the United States using internet infrastructure located in the United States.
In addition, authorities assert that Bitzlato worked closely with the nameless online marketplace known as the Hydra Market, which facilitated the sale of illicit substances, stolen bank information, services for money laundering, and bogus identification documents.
In April of 2022, police enforcement from the United States and Germany collaborated to shut down Hydra Market.
Legkodymov's arraignment was expected to occur on Wednesday at a court in the Southern District of Florida following his arrest.
In addition, the Financial Crimes Enforcement Network of the US Treasury is cooperating closely with the relevant authorities in France to initiate parallel enforcement measures concerning Bitzlato.