By Michael Scott
The Justice and Treasury Departments combined forces to seize Bitzlato Ltd assets citing it facilitated the laundering of illicit finance. The official communication conveyed by the US authorities on Wednesday, January 18, confirmed the Bitzlato founder’s arrest in Miami.
Authorities addressing the late Wednesday conference confirmed the imminent closure of the Hong Kong-based crypto exchange. The update confirmed the arrest of Bitzlato founder Anatoly Legkodymov to stop the exchange from facilitating transactions with criminals with Russian links.
Coordinated Crackdown on Bitzlato
In her address at the press conference, Deputy attorney general Lisa Monaco lauded the coordinated enforcement actions for swift action. In a hat-tipping gesture, Monaco revealed the input of French authorities, the Federal Bureau of Investigation, and the U.S. Treasury Department to break the criminal ecosystem.
The Treasury’s spokesperson of the Financial Crimes Enforcement Network (FinCEN) referred to Bitzlato as a primary money-laundering concern, a label utilized to classify serious sanctions warranting the deployment of a criminal-fighting arsenal to eliminate the business from the global financial system. Explaining the category, the deputy secretary of Treasury, Wally Adeyemo, indicated the label portrays Bitzalto as an international pariah.
Confirming the arrest, the US authorities identified Legkodymov’s citizenship as Russian though a resident of China. The Justice Department demonstrated that arresting Legkodymov would allow his arraignment scheduled a few hours later before the Southern District of Florida court.
Bitzlato’s Intermediary Role to Illicit Transactions
Although Bitzlato remained unknown to most communities, the US authorities indicated that the crypto exchange harbored wallets and peer-to-peer services used by criminals to execute illegal trade. The Justice Department officials alleged that Bitzlato facilitated $700 million in transactions through indirect and direct transfers.
FinCEN decried the innocence asserted by the Bitzlato’s sympathizers by illustrating the company’s active intermediary role in facilitating illicit transactions on behalf of ransomware actors. Besides, FinCEN linked the ransomware actors to the Russian government.
Monaco appreciated the coordinated crackdown against Bitzlato as a significant action by the US to break a crypto-based criminal network. Confirming the seizure of the crypto exchange’s servers, Monaco linked the firm to the routine remittances within the Russian-based Hydra Market, considered a darknet platform in 2022. The arrest will paralyze the axis supporting the Hydra-Bitzlato crypto-crime.