The US Department of Justice announced the arrest of the owner of the Russian platform, for his role in the alleged transmission of illicit money.
The Bitzlato cryptocurrency exchange, better known in the Russian-speaking market segment, has been removed as part of an “international cryptocurrency enforcement action,”. the US Department of Justice announced. The Russian owner of the platform has been arrested for his role in the alleged illicit money transmission. Bitzlato claimed it was hacked.
US authorities have detained Anatoly Legkodymov, a resident of China, on charges that his Hong Kong-registered cryptocurrency trading platform, Bitzlato, processed illicit funds worth hundreds of millions of dollars. The Russian, co-founder and majority owner of the exchange, was arrested by three e FBI in Miami on Tuesday, a senior US Department of Justice (DOJ) official revealed.
US and France Hit Crypto Exchange Bitzlato, Russian Co-Founder Arrested in Miami
During a press conference, Assistant Attorney General Lisa Monaco said that Justice Department agents and prosecutors, in collaboration with the US Treasury Department and French police, have “disrupted Bitzlato, a cryptocurrency exchange with China-based, known for laundering criminal proceeds from the dark web,” as well as ransomware attacks.
Legkodymov is accused of operating the exchange as a “high-tech financial center that, in his own words, supplied ‘known criminals,'” Monaco explained. She went on to allege that Bitzlato was a “crucial financial resource” for Hydra, the largest darknet marketplace with Russian roots, which was shut down in April by German police with the support of US agencies last year.
According to the Department of Justice, buyers of Hydra financed illicit purchases of crypto accounts hosted on Bitzlato, while sellers of drugs, stolen financial information, and hacking tools, sent criminal proceeds to accounts on the exchange, which together amount to $700 million. in direct and indirect transfers between 2018 and 2022.
By midday on Wednesday, Bitzlato’s website was replaced by a notice saying French authorities had seized the service, Reuters reported.
Crypto Exchange Bitzlato Claims It Was Hacked and Stops Withdrawals
On Wednesday, Bitzlato operators announced on Telegram that the exchange had suffered a hack attack. They told users that withdrawals had been suspended indefinitely, and asked them to refrain from sending coins to the platform until the issue is resolved.
The hack allegedly took place after the exchange on Tuesday announced scheduled maintenance for Thursday, January 19, “aimed at improving the operation of the service and its security.” The notice informed users that it would stop trading between 5 and 9 a.m. Moscow time.
Online cryptocurrency exchanges like Bitzlato are popular in Russia and the former Soviet space, but since crypto assets are not yet fully regulated in the region, they are often targeted by Commonwealth of Independent States authorities. A report recently revealed that the Belarusian judiciary imposed a heavy fine on the operator of one such platform.
By Audy Castaneda
