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Tuesday, February 27, 2024

Bitzlato Co-founder Pleads Guilty to AML Violations, Agrees to Dismantle Exchange

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According to the U.S. Attorney’s Office for the Eastern District of New York, Anatoly Legkodymov, the co-founder of Bitzlato, a Hong Kong-registered virtual currency exchange, has entered a guilty plea for money laundering charges.

Initially arrested in Florida, Legkodymov’s case was transferred to New York.

Bitzlato Founder Pleads Guilty

In a press release dated December 6, 2023, the U.S. Department of Justice (DoJ) disclosed that Legkodymov is responsible for “transporting and transmitting” more than $700 million in illicit funds. The DoJ alleges that Bitzlato served as a major service provider for participants in dark markets and provided a “safe haven for ransomware criminals.”

As part of the plea agreement, Legkodymov will dismantle Bitzlato, relinquishing any claim to the seized assets of the crypto exchange, amounting to over $23 million.

Reportedly, Bitzlato has connections to Hydra Market, an online illegal narcotic marketplace involved in criminal activities such as money laundering, drug trafficking, the sale of unlawfully obtained financial information, and the creation of fraudulent identities.

Bitzlato received over $15 million in ransomware proceeds, asserting that Legkodymov and his team knew criminals were utilizing the exchange. Subsequently, the European Union police entity Europol has made allegations that Bitzlato was involved in laundering funds exceeding $1 billion.

Bitzlato Team Members Detained

Legkodymov’s arrest on money laundering charges in January 2023 coincided with the U.S. Department of Justice’s announcement of a significant global crypto enforcement action.

In addition to Legkodymov, several key figures associated with Bitzlato, including former CEO Mikhail Lunev, marketing director Alexander Goncharenko, contractor Pavel Lerner, and an unnamed dev-ops engineer, were apprehended in various European countries.

The arrests occurred as reported by co-founder Anton Shkurenko, who has eluded capture in Moscow and expressed intentions to relaunch the platform. Despite the co-founder’s statement, the main website displayed a notice indicating that French prosecutors seized it as of December 7.

Bitzlato was designated a “primary money laundering concern” by the Department of the Treasury’s Financial Crimes Enforcement Network earlier in the year. In January, French authorities seized Bitzlato’s infrastructure.

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