US Department of Justice accused founder of the little-known Hong Kong platform Bitzlato in laundering Russian funds. Anatoly Legkodymov was detained by US authorities in Miami on January 17th.
On January 18, the Bitzlato team announced a hack and the withdrawal of part of the funds. A few hours later, the platform announced the suspension of the service. A stub appeared on the site of the trading platform about the suspension of work due to the intervention of the authorities. In Spain, Portugal and Cyprus, five more Bitzlato top managers, mostly citizens of Russia and Ukraine, were detained.
Founder and Majority Owner of Bitzlato, a Cryptocurrency Exchange, Charged with Unlicensed Money Transmitting https://t.co/ojZq9TRF5M (announced with @TheJusticeDept and @NewYorkFBI)
— US Attorney EDNY (@EDNYnews) January 18, 2023
The US authorities claim that users of the popular darknet market Hydra exchanged more than $700 million in cryptocurrency through Bitzlato before it closed in April 2022. The exchange earned another $15 million through the use of ransomware.
Bitzlato had an office in the Federation Vostok tower of the Moscow City complex, experts from Chainalysis, a blockchain analysis company, wrote about this. Moreover, Bitzlato appeared in the reports as the second cryptocurrency exchange in Moscow City in terms of the amount of received cryptocurrency.
“On May 29, 2019, Legkodymov wrote to a colleague in an internal chat that Bitzlato users are “known as scammers” who use other people’s documents for registration. Legkodymovts has repeatedly reported that Bitzlato’s customer base consists of “drug addicts buying drugs on Hydra” and “drug dealers,” according to a release issued by US authorities.
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