US Arrests Russian Crypto Boss Who Dealed With Known Scammers | Crypto News

[ad_1]

The Justice Ministry said Anatoly Legkodymov operated the Hong Kong-registered Bitzlato exchange as a haven for money laundering.

US authorities have arrested a Russian national accused of running a Hong Kong-registered cryptocurrency exchange as a money laundering business.

The US Department of Justice said Anatoly Legkodymov, 40, a Russian living in Shenzhen, China, is set to face trial on Wednesday for his role in channeling a total of $700 million in illicit funds via the Bitzlato virtual currency exchange, which advertised itself as requiring minimal identification from users.

The arrest was carried out in conjunction with the U.S. Treasury Department’s Financial Crimes Enforcement Network and foreign authorities, officials said.

Overnight, the Department worked with key partners at home and abroad to disrupt Bitzlato, the China-based money laundering engine that fueled a high-tech cryptocurrency axis, and to arrest its founder, the Russian national Anatoly Legkodymov, US Deputy Attorney General Lisa Monaco said. reporters in Washington, DC.

Today’s actions send a clear message: whether you’re breaking our laws from China or Europe or abusing our financial system from a tropical island, you can expect to be held accountable for your crimes in US court. , added Monaco.

The arrest comes less than a month after the Justice Department announced the extradition of fellow cryptocurrency leader, Sam Bankman-Fried, the former CEO of the bankrupt cryptocurrency firm. FTX. He was staying in the Bahamas and faces charges of fraud and money laundering.

The US Department of Justice hailed Legkodymov’s arrest in Miami, Florida on Tuesday night as a blow to the cryptocurrency ecosystem.

Officials said the exchange caters to known scammers, including criminals seeking sanctuary for money earned through drug trafficking and the sale of stolen financial information.

Reporting from Washington, DC, Al Jazeeras Alan Fischer noted that Treasury officials said Wednesday that many of the people using the site are Russians and Russian criminals, and that they are laundering money.

This suggests that Russian criminals could not do business if the Russian authorities, the Russian government, did not allow them to do so. So that they [US officials] I think some of the money that goes through this exchange is also used to help fund Russia’s war in Ukraine, he said.

Asked at the press conference whether Bizlato had helped Russia evade sanctions related to its invasion of Ukraine, US Deputy Treasury Secretary Wally Adeyemo said: “What we know is that the Russia has established a permissive ecosystem for cybercriminals.

Bitzlatos’ biggest trading partner was Hydra, an anonymous darknet online marketplace that was shut down by US and German authorities last year.

Hydra sold illegal drugs, stolen credit card data, counterfeit currency and fake identity documents, obscuring the identities of those involved using encryption.

When it closed in April 2022, the Hydra Marketplace had around 17 million customer accounts and more than 19,000 supplier accounts, according to the German Federal Police.

The so-called darknet includes websites that can only be accessed with specific software or permissions, ensuring user anonymity.

Prosecutors said Bitzlato had processed $4.58 billion in cryptocurrency transactions since May 3, 2018, although not all of the transactions involved criminal activity.

Legkodymov is accused of running an unlicensed money transfer business. He faces a maximum sentence of five years in prison if convicted.

[ad_2]