• Hong Kong-registered crypto exchange Bitzlato and its founder Anatoly Legkodymov were seized by French authorities, Europol, and authorities in Spain, Portugal, and Cyprus.
• Legkodymov was arrested in Miami and charged with allegedly running an unregistered money-transmitting business and facilitating illicit fund transmissions.
• The U.S. DOJ, U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN), and the National Cryptocurrency Enforcement Team (NCET) are taking concurrent enforcement actions against the exchange.
The crypto world was rocked by news of Hong Kong-registered crypto exchange Bitzlato and its founder Anatoly Legkodymov being seized by French authorities, Europol, and authorities in Spain, Portugal, and Cyprus. On Wednesday, Legkodymov was arrested in Miami and charged with allegedly running an unregistered money-transmitting business and facilitating illicit fund transmissions.
The U.S. Department of Justice (DOJ), the U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN), and the National Cryptocurrency Enforcement Team (NCET) have taken concurrent enforcement actions against the exchange. Legkodymov could face a maximum jail time of five years if convicted. He is scheduled to be arraigned at the U.S. District Court for the Southern District of Florida on January 18.
Bitzlato was the second-largest crypto transactions counterparty for users of Hydra, the darknet marketplace shut down last year. It is alleged that it processed hundreds of millions of dollars in Bitcoin and other virtual currency transactions for Hydra customers. It is also believed that Legkodymov used Bitzlato to launder the proceeds of criminal activity.
The DOJ’s Deputy Attorney General Monaco said in a press conference: “Today’s actions send a clear message: whether you break our laws from China or Europe—or abuse our financial system from a tropical island—you can expect to face justice.” She added that the investigation is ongoing and that other individuals and entities involved in the alleged money laundering scheme may still face charges.
The crypto industry was already under the microscope due to its potential for money laundering and other crimes. This latest development serves to further highlight the importance of proper regulation and enforcement of anti-money laundering laws within the crypto space. It is hoped that this case will serve as a warning to all those involved in illicit activities in the crypto world and encourage greater compliance with existing regulations.