The US Department of Justice announced the arrest of Anatoly Legkodymov, the founder of the Bitzlato crypto exchange platform. He is accused of laundering $700 million associated with the closed darknet marketplace Hydra.
Founder and Majority Owner of Bitzlato, a Cryptocurrency Exchange, Charged with Unlicensed Money Transmitting https://t.co/ojZq9TRF5M (announced with @TheJusticeDept and @NewYorkFBI)
— US Attorney EDNY (@EDNYnews) January 18, 2023
Before that, on January 17, the FBI arrested in Miami (Florida) of a Russian citizen. This case was investigated jointly with law enforcement officers of France. Assistance was provided by Belgian and Dutch colleagues, as well as Interpol.
Legkodymov Anatoly
Legkodymov, 40, nicknamed “Gandalf,” was reported to have run a money transfer business that “transferred illegal funds and violated U.S. regulatory requirements, including anti-money laundering regulations.”
“Hydra Market users have exchanged more than $700 million in cryptocurrency with Bitzlato directly or through intermediaries until the marketplace shut down law enforcement USA and Germany in April 2022. Bitzlato also received over $15 million in ransomware revenue,” the statement said.
According to US law enforcement officers, Lekgodymov deliberately built the work of the platform registered in Hong Kong, ignoring the rules for identifying users on the principle of “neither selfies nor passports are required.”
Prosecutors found confirmation in the correspondence that the founder of Bitzlato and other managers understood that the lack of KYC meant the flow of “dirty money” through the platform. One of Legkodymov’s colleagues warned that “the client base consists of drug addicts buying substances on Hydra” and drug dealers.
As part of the case, the French authorities, together with partners from Spain, Portugal and Cyprus, arrested the infrastructure of the crypto exchange. The site displays a “stub” that informs about enforcement actions against Bitzlato.
January 18 Bitzlato team reported a burglary and withdrawal of part of the funds. A few hours later, the platform announced the suspension of the service.
US Deputy Attorney General Lisa Monaco called the operation against Bitzlato “a significant blow to the crypto-criminal ecosystem.”
