Daniel Harrison Bitzlato, a cryptocurrency exchange, was seized by authorities, and the company’s co-founder was arrested on charges of supporting a “high-tech axis of crypto crime.” Russian national Anatoly Legkodymov, who was living in China at the time, was charged with running a business that catered to “crooks” by the US Department of Justice.
Bitzlato was accused of laundering over $700m (£567m), or breaking rules meant to prevent money laundering. In Miami, Mr. Legkodymov was taken into custody. US Attorney Breon Peace said at a press conference on Wednesday that “institutions that trade in cryptocurrency are not above the law and their owners are not beyond our reach.”
“According to the allegations, Bitzlato marketed itself to criminals as a “no questions asked” cryptocurrency exchange and received hundreds of millions of dollars in deposits. The defendant has finally had to face the consequences for the harm his company caused to the cryptocurrency industry.” The complaint states that since 2018, the Hong Kong-based exchange had handled cryptocurrency transactions totaling approximately $4.5 billion.
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Prosecutors claimed the company was a “haven for criminal proceeds and funds intended to be used in criminal activity” due to its low identification requirements for customers. It was claimed that the company was aware of the problems because of an internal document that labelled Bitzlato as dealing with “dirty money” without following normal customer-vetting procedures.
Hydra Market was a dark web marketplace for drugs, money laundering, and stolen financial information that was shut down last year by international authorities. Prosecutors claim Bitzlato did “substantial” business with Americans despite the company’s claim that it did not accept customers from the United States. U.S. law enforcement officials coordinated with their counterparts in France and other countries.
