• The United States Department of Justice announced a „major international cryptocurrency enforcement action“ against crypto firm Bitzlato and the arrest of its founder, Anatoly Legkodymov.
• The enforcement actions were taken in coordination with France, seizing Bitzlato’s website and labeling the business as a „primary money laundering concern“ connected to Russian illicit finance.
• The criminal complaint against Bitzlato was based on the firm being a „crucial financial resource“ for the Hydra darknet marketplace, allowing users to launder funds including those from ransomware attacks.
The United States Department of Justice has taken a major step to crack down on the use of cryptocurrencies in illicit activities. On January 18th, the Department announced a major international cryptocurrency enforcement action against crypto firm Bitzlato and the arrest of its founder, Anatoly Legkodymov. The action was taken in coordination with France, with Bitzlato’s website and resources being seized, and the firm being labeled as a „primary money laundering concern“ connected to Russian illicit finance.
This enforcement action comes after the FBI uncovered evidence that Bitzlato had been helping facilitate illegal activities by enabling users to launder money through its platform. According to the Department of Justice, Bitzlato was a “crucial financial resource” for the Hydra darknet marketplace, allowing users to launder funds including those from ransomware attacks. The Department estimates that the firm had helped launder over $700 million in illicit funds.
In response to the evidence uncovered by the FBI, Legkodymov was arrested on January 17th in Miami, and is scheduled to be arraigned in the U.S. District Court for the Southern District of Florida. It is expected that he will face criminal charges for his involvement in the money laundering scheme.
The Department of Justice’s action is a clear sign that the U.S. government is committed to cracking down on the use of cryptocurrencies for illegal activities. It is hoped that, with further enforcement actions like this one, cryptocurrencies will become less attractive for those seeking to engage in illicit activities.