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US arrests crypto exchange founder

US arrests crypto exchange founder

US authorities have charged the Russian founder of Hong Kong-based crypto exchange Bitzlato, which it says was used to launder hundreds of millions of dollars in criminal proceeds from the darknet.

Bitzlato majority owner Anatoly Legkodymov, who lives in China, was arrested by the FBI in Miami on Tuesday, accusing him of operating a "high-tech financial hub that, in his own words, catered to 'known crooks'".

Bitzlato processed more than $700 million in illegal funds, from activities including drug deals, illegal gambling, and ransomware attacks, according to the US Justice Department.

The US, alongside several European partners, has also acted to seize Bitzlato’s servers and cryptocurrency, effectively shutting the exchange down.

Deputy Attorney General Lisa O Monaco says: "Overnight, the Department worked with key partners here and abroad to disrupt Bitzlato, the China-based money laundering engine that fueled a high-tech axis of cryptocrime, and to arrest its founder, Russian national Anatoly Legkodymov.

"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."

Legkodymov is charged with conducting an unlicensed money transmitting business. If convicted, he faces a maximum penalty of five years in prison.

Meanwhile, the US Treasury’s Financial Crimes Enforcement Network (FinCEN) has officially identifying Bitzlato as a “primary money laundering concern” in connection with Russian illicit finance - linking the move with Russia's invasion of Ukraine.

Deputy Secretary of the Treasury Wally Adeyemo says: "At a time when Russia is waging a brutal and unjust war in Ukraine, and as it seeks to circumvent sanctions and governance controls to fill its coffers and sustain its violence, we have no tolerance for criminal enterprises enriching Russia’s malicious interests."

Comments: (1)

A Finextra member
A Finextra member 19 January, 2023, 10:06Be the first to give this comment the thumbs up 0 likes

A Russian owned and managed, Chinese domiciled Crypto currency exchange operation?  Not sure how many legitmate customers they would have attracted, but if they did have some,  then sadly their funds are locked up too!  Crypto is still the Wild Wild West.... Or should that be Wild Wild East?