DOJ Charges Cryptocurrency Exchange Founder Bitzlato with Processing $700 Million in Illegal Fonds TechCrunch

The US Department of Justice announced in a press conference that it had done so ArrestedAnatoly Legkodimov is accused of processing more than $700,000,000 in illicit funds.

“The administration worked overnight with key partners here and abroad to disrupt Bitzlato, the China-based money-laundering engine that fueled the high-tech hub of crypto, and to apprehend its founder, Russian national Anatoly Legkodimov,” said Deputy Attorney General Lisa. O. Monaco. Today’s actions send a clear signal: whether they violate our laws in China or Europe – and our financial system from… tropical island You can expect to be answered for your crimes in a United States courtroom.”

According to the Department of Justice Bitzlato allowed users trade cryptocurrencies without verifying identity. Customers were informed by the Hong Kong-registered exchange that it was “No photos, No passports.” [are] Wanted.” The government said this lack of KYC turned Bitzlato into a hotbed of criminal activity.

The US government has cracked down on the cryptocurrency industry. Coinbase, a popular cryptocurrency exchange, was recently shut down. He was fined $50 millionNew York State regulators for failing to conduct adequate background screenings. According to government filingCoinbase contracted outside contractors to handle a backlog that included more than 100,000 transaction monitoring alarms that were not reviewed. Coinbase also failed to implement quality control measures. It turns out that a lot of this contract work is full of errors. The regulators found that Coinbase failed to report potential cases for money laundering, drug trafficking, or CSAM-related activity.

Sam Bankman-Fred was the founder of FTX. ArrestedAfter his $32 million company collapsed, he was arrested on federal charges of defrauding investors and filed for bankruptcy. Bankman-Fried maintains that it is. Not guiltyAnd even started a new file substackHis former partners, like Gary Wang, FTX cofounder, and Caroline Ellison, CEO of Alameda, have defended him. plead guiltyFederal charges.

However, events such as the FTX bankruptcy have shaken the crypto industry. long time encryption InsidersHe didn’t seem aware of what Bitzlato was doing before the DOJ announcement. Arkham, a cryptocurrency intelligence tool, says that wallets linked with Bitzlato only contain $11,000. At its peak it contained over $6 million. This makes Bitzlato a very minor player in the industry.

Legkodymov could be sentenced to up to five year imprisonment if convicted.

“The FBI and our partners remain steadfast in our commitment to keeping cryptocurrency markets — as with any financial market — free from illicit activity,” said Michael J. Driscoll, Assistant Director in the FBI’s New York Field Office. “Today’s action should exemplify that commitment as Legkodimov will now face the consequences of his actions in our criminal justice system.”