US authorities are considering taking steps against Bitzlato and its creator
The Department of Justice, the Treasury Department, and French law enforcement acquired a number of Bitzlato’s assets on the grounds that the company helped launder criminal transactions totalling $700 million.
The United States Department of Justice announced a “significant worldwide cryptocurrency enforcement action” against Bitzlato and the arrest of the company’s creator, Anatoly Legkodymov.
U.S. Deputy Attorney General Lisa Monaco said on January 18 that authorities have initiated enforcement proceedings against Bizlato in collaboration with France, seizing the company’s website and identifying it as a “major money laundering concern” linked to Russian illicit funding.
According to Monaco, the Department of Justice collaborated with the Treasury Department and French law enforcement to prosecute Bitzlato for “operating a money transmission firm that carried and communicated criminal funds while failing to comply with U.S. regulatory protections.”
On January 17 in Miami, FBI agents detained Legkodymov, a Russian citizen residing in China, as part of the investigation against Bitzlato. His arraignment is planned for the U.S. District Court for the Southern District of Florida.
U.S. officials said in their criminal complaint against Bitzlato that the company was a “crucial financial resource” for the Hydra darknet marketplace, enabling users to launder payments including those from ransomware attacks.
“Until April 2022, when it was shut down by U.S. and German law authorities, Hydra Market customers transferred more than $700 million in cryptocurrencies with Bitzlato, either directly or through middlemen. Additionally, Bitzlato got around $15 million in ransomware earnings.”
The enforcement action was a concerted effort throughout Europe and the United States to confiscate much of Bitzlato’s assets, including the company’s servers, and to arrest the company’s creator. Monaco described the action as the “most major enforcement endeavor” against an exchange since the formation of the National Cryptocurrency Enforcement Team in October 2021.
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