Authorities from the United States accused the creator of the cryptocurrency exchange Bitzlato Ltd. with aiding in the money-laundering of criminals.
For allegedly laundering illegal payments for ransomware perpetrators headquartered in Russia, the Treasury Department classified Bitzlato under a provision of the USA Patriot Act, a legislation used to fight money laundering and terrorism funding.
This kind of action, a very infrequent "death-knell punishment" that disconnects an entity from the American financial system, has mostly been employed in the past against banks and other financial institutions and, in most instances, has resulted in the closure of the financial institution.
Bitzlato, which is situated in Hong Kong but operates internationally, reportedly transacted more than $700 million in bitcoin with Hydra Market, a darknet marketplace that was the largest in the world when it was shut down in April 2022, the U.S. Justice Department stated. According to the Justice Department, Bitzlato also got more than $15 million in ransomware earnings.
Bitzlato's creator and principal owner, Anatoly Legkodymov, was detained on Tuesday evening in Miami. The first court appearance for Mr. Legkodymov, a 40-year-old Russian national who resides in Shenzhen, China, is set for Wednesday afternoon before a federal court in Miami.
Deputy Attorney General Lisa Monaco said Wednesday:
“Today the Department of Justice dealt a significant blow to the cryptocrime ecosystem. Today’s actions send the clear message: Whether you break our laws from China or Europe—or abuse our financial system from a tropical island—you can expect to answer for your crimes inside a United States courtroom.”
