Anatoly Legkodymov, the co-founder of virtual currency exchange Bitzlato, pleaded guilty to a criminal charge in the US. Legkodymov was arrested in January and was accused of processing about $700 million in illicit funds.
Anatoly Legkodymov, co-founder and majority owner of Bitzlato, pleaded guilty to criminal charges in the US and agreed to forfeit $23 million in a deal with federal prosecutors. Legkodymov, a Russian national, was arrested in January and charged with facilitating money laundering for criminals. Following his arrest, the Hong Kong-registered exchange was shut down. US authorities named crypto exchange Binance as a counterparty in the matter.
Safe Haven for Ransomware Criminals
In a press release, the US Attorney’s Office for the Eastern District of New York announced that Legkodymov pleaded guilty to operating a “money transmitting business that transported and transmitted illicit funds.” According to the press release, Bitzlato served as a “primary conduit for dark market purchasers and sellers, as well as a safe haven for ransomware criminals.”
As part of his plea agreement, Legkodymov agreed to dissolve the exchange and to relinquish any claim over approximately $23 million in seized Bitzlato assets.
United States Attorney Breon Peace commented:
“Legkodymov’s guilty plea today confirms that he was well aware that Bitzlato, his cryptocurrency exchange, was being used like an open turnstile by criminals eager to take advantage of his lax controls over illicit money transactions.
The defendant may have thought he was operating from a safe haven overseas for his ‘No Questions Asked’ clearinghouse, but this prosecution and conviction demonstrate otherwise.”
Deputy Attorney General Lisa O. Monaco said:
“As alleged, Bitzlato advertised a safe haven for fraudsters, thieves, and other criminals to launder illicit proceeds—but their business model didn’t account for federal law enforcement.
We are dismantling and disrupting the cryptocrime ecosystem using all tools available—including criminal prosecution. In January, the Department and our partners took down Bitzlato’s infrastructure and seized its cryptocurrency. Today’s conviction of Bitzlato’s founder is the latest product of our efforts.”
Legkodymov Confirms Association with Hydra Market
The co-founder also confirmed Bitzlato’s association with Hydra Market and acknowledged the platform exchanges over $700 million in crypto with Hydra. Hydra Market was a darknet marketplace shut down in April 2022 after seizures by US and German law enforcement. According to reports by Reuters, Legkodymov faces up to five years in prison. No sentencing date has been set.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
