US authorities have charged Anatoly Legkodymov, the Russian founder of Hong Kong-based crypto exchange Bitzlato, for allegedly laundering hundreds of millions of dollars in criminal proceeds from the darknet.
Legkodymov, who resides in China, was arrested by the FBI in Miami on Tuesday. He is accused of running a “high-tech financial hub” that purportedly catered to “known crooks.” According to the US Justice Department, Bitzlato processed over $700 million in illegal funds attributed to activities such as drug trafficking, illegal gambling, and ransomware attacks.
In collaboration with several European partners, US authorities have also moved to seize Bitzlato’s servers and cryptocurrency, effectively shutting down the exchange.
Deputy Attorney General Lisa O Monaco stated, “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 has been charged with operating an unlicensed money transmitting business, which carries a maximum penalty of five years in prison if convicted.
Additionally, the US Treasury’s Financial Crimes Enforcement Network (FinCEN) has officially designated Bitzlato as a “primary money laundering concern” in relation to Russian illicit finance, linking this designation to Russia’s invasion of Ukraine.
Deputy Secretary of the Treasury Wally Adeyemo remarked, “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.”