- Bitzlato Ltd., a cryptocurrency exchange, has been identified as a major money-laundering concern by US authorities.
- The majority owner of Bitzlato Ltd., Anatoly Legkodymov, is accused of operating an unauthorised money-transfer operation.
The China-based cryptocurrency exchange Bitzlato Ltd. has been recognised by the Financial Crimes Enforcement Network of the US Treasury Department as a money laundering concern connected to Russian criminal funding.
This morning in federal court in Brooklyn, a case was filed with the court accusing Anatoly Legkodymov, a senior executive of Bitzlato Ltd. (Bitzlato), a cryptocurrency exchange certified in Hong Kong, of operating a money-transmitting enterprise that ceased to adhere to anti-money laundering regulations and transported illegal funds.
The first court appearance for Mr. Legkodymov, a 40-year-old Russian national who resides in Shenzhen, China, is set for Wednesday afternoon at a federal court in Miami.
The majority of the time, this kind of conduct has been taken against banks and other financial institutions previously. It is a seldom used death-knell sanction that disconnects the entity from the American financial system and, in most cases, forces the financial institution to dissolve.
As part of an investigation, French police removed Bitzlato’s digital infrastructure alongside Europol and collaborators in Spain, Portugal, and Cyprus.
Police in Europe apprehended 15 alleged con artists and shut down a global network of call centres that marketed phoney cryptocurrencies, alleging that the scammers stole hundreds of millions of euros from victims.
The DOJ said that Bitzlato purportedly created a shelter for illegal funds and monies planned for the purpose of illicit behaviour as a result of weak know-your-customer (KYC) procedures.
Furthermore, despite the cryptocurrency exchange’s assertion that it does not permit customers from the United States to open accounts, Legkodymov’s findings revealed that the platform saw a significant volume of traffic from American IP addresses, with more than 250 million visits in July 2022 alone
According to the Justice Department, Bizlato exchanged more than $700 million in cryptocurrencies with patrons of Hydra Market, a darknet marketplace for illegal goods like drugs and fraudulent designations.
After designating Bitzlato Ltd as a “money laundering concern” associated with Russian criminal finance, Treasury’s Financial Crimes Enforcement Network (FinCEN) announced that it has restricted various transmittals of funds concerning Bitzlato by any covered banking institution.
The complaint contains an allegation as opposed to a charge, and the defendant is assumed innocent until and unless proven guilty. He may spend up to five years in prison if found guilty of running an illicit money-transfer business.