The US arrests the Russian boss of China-based crypto exchange Bizlato, accusing him of operating the darkweb site as a “high-tech axis of cryptocrime.”
- US prosecutors on Wednesday announced the seizure of crypto exchange Bitzlato
- The little-known darkweb site allegedly functioned as a financial crime hub
- Russian citizen Anatoly Legkodymov allegedly ran the site from China
- Legkodymov was arrested in Miami Tuesday night on federal charges
US authorities have arrested the Russian founder of a Hong Kong-based dark web crypto exchange called Bitzlato, saying it was being used as a safe haven for online criminals.
Anatoly Legkodymov, a Russian citizen living in China, was arrested in Miami Tuesday night on charges of operating an unlicensed money transfer business.
Assistant US Attorney General Lisa O. Monaco told reporters Wednesday that the prosecution alleges Legkodymov “operated Bitzlato as a high-tech financial center that, in his own words, served “known crooks.”
She said Bitzlato was collaborating with the “notorious dark web market Hydra,” a dark web marketplace for drugs, fake IDs, and other illegal products
US Assistant Attorney General Lisa O. Monaco announces the arrest of Anatoly Legkodymov, a Russian citizen residing in China
“Hydra and Bitzlato formed a high-tech crypto-crime axis: Hydra buyers funded illicit purchases — of illegal drugs, stolen financial information, and hacking services — from crypto accounts hosted at Bitzlato, and sellers of these illicit goods and services at Hydra criminals sent proceeds to accounts at Bitzlato,” Monaco said.
The Justice Department said Bitzlato has conducted more than $700 million in cryptocurrency exchanges with Hydra Market users, either directly or through its intermediaries.
Prosecutors allege that Legkodymov’s China-based cryptocurrency exchange, of which he was the majority owner, failed to implement necessary anti-money laundering safeguards.
They further claim that the exchange required minimal identification from its users and even allowed users to provide information belonging to “straw man registrants,” individuals who served as a cover for users.
A confiscation notice appears on the Darkweb page of Bitzlato, a crypto exchange
“Whether you’re breaking our laws in China or Europe, or abusing our financial system from a tropical island, you can expect to face justice for your crimes in a United States courtroom,” Monaco said in a statement, an obvious clue on last month’s arrest in the Bahamas of Sam Bankman-Fried, the former CEO of failed cryptocurrency exchange FTX.
Legkodymov is charged with a maximum sentence of five years in prison if convicted.
Legkodymov, 40, was in custody on Wednesday. It was unclear if he had an attorney who could speak for him.