News has emerged from the U.S. Attorney’s Office for the Eastern District of New York that Bitzlato’s co-founder, Anatoly Legkodymov, has confessed to money laundering charges. Bitzlato, a virtual currency exchange registered in Hong Kong, has been under scrutiny. Legkodymov, initially apprehended in Florida, saw his case moved to New York.
Admission of Guilt and Its Implications
The U.S. Department of Justice (DoJ) announced on December 6, 2023, that Legkodymov has admitted to being involved in the transfer and transmission of over $700 million of illicit funds. The DoJ asserts that Bitzlato was a significant facilitator for dark market participants, providing a “safe harbor” for those involved in ransomware crimes.
In light of his guilty plea, Legkodymov has agreed to dissolve Bitzlato and forfeit any rights to the crypto exchange’s seized assets, which total over $23 million.
Bitzlato’s Ties to Illegal Activities
Reports have linked Bitzlato to Hydra Market, an online illicit drug marketplace. Hydra Market has been implicated in various criminal activities, including money laundering, drug trafficking, selling illegally obtained financial information, and creating fraudulent identities.
Bitzlato allegedly received over $15 million in ransomware proceeds. It is claimed that Legkodymov and his team were aware that criminals were using the exchange. Consequently, Europol, the European Union’s law enforcement agency, has accused Bitzlato of being involved in laundering funds exceeding $1 billion.
Bitzlato Team Members Arrested
Legkodymov’s arrest on money laundering charges in January 2023 was part of a significant global crypto enforcement action by the U.S. Department of Justice. Other key figures linked to Bitzlato, including former CEO Mikhail Lunev, marketing director Alexander Goncharenko, contractor Pavel Lerner, and an unnamed dev-ops engineer, were detained in different European countries. This information was disclosed by co-founder Anton Shkurenko, who has managed to evade arrest in Moscow and has plans to revive the platform.
Despite Shkurenko’s intentions, the main website displayed a notice that French prosecutors had seized it as of December 7. Earlier in the year, Bitzlato was identified as a “primary money laundering concern” by the Department of the Treasury’s Financial Crimes Enforcement Network. In January, French authorities confiscated Bitzlato’s infrastructure.
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