China-based Anatoly Legkodimov was arrested in Miami on Tuesday night and was due to appear in court on charges of operating an illegal money transfer company.
Legkodymov is the founder of the crypto exchange Bitzlato.
Bitzlato is a Hong Kong-based company that has been a “key source of funding” for the Hydra dark web marketplace, the largest and most prominent of its kind.
On the other hand, a Russian source claims that Legkodym owns 73.4 percent of Bitzlat.
Bitzlato has an office on a high floor in Moscow’s Federation Tower, which handled deals of $100,000 or more.
According to reports, Legkodymov and his main partner Bitzlato are also linked to Russian crypto mining equipment distributor A-HVT.
Legkodymov has had a long and troubled career in the cryptocurrency sector spanning more than a decade.
He published his first post on the BitcoinTalk forum in 2011, describing the circumstances that resulted in the loss of more than 50 BTC.
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Why was Anatoly Legkodymov, the founder of Bitzlato Crypto, arrested?
Anatoly Legkodimov, Bitzlato Crypto founder and senior executive, was arrested in Miami on Tuesday.
He is accused of ordering the company to deliberately send money obtained through cybercrime and other illegal activities.
Legkodymov did not put in place the necessary anti-money laundering measures and only required minimal user identification.
It even allows them to provide information belonging to “straw registrants,” people who act as fronts for users.
Breon Peace, the US attorney in Brooklyn, where the complaint was obtained, claims that Bitzlato has become a haven for criminals, such as drug dealers and ransomware gangs.
They knew that Bitzlato would not be able to reveal the true identity of its users when the authorities tracked their payments to Bitzlato.
According to Deputy Attorney General Lisa MonacoBitzlato, a Hong Kong-based company, was a “key source of funding” for the Hydra dark web marketplace, the largest and most reputable of its kind.
Anatolij Legkodimov accused of financial crime in the amount of 700 million dollars
Anatoly Legkodimov is accused of running Bitzlato Ltd., an unauthorized money transfer business.
As the US hunts down suspects in cybercrime, Russian Anatoly is accused of money laundering using a cryptocurrency exchange that allegedly concealed over $700 million in illegal gambling and drug sales.
Investigators claim that Legkodymov and other Company officials discussed how drug traffickers and other criminals use their platform to hide their profits, even calling some of the funds sent through their portals “dirty money.”
For this reason, Legkodymov, the founder, faces a maximum sentence of 5 years in prison if found guilty of the crime.
On Wednesday, the 40-year-old founder was detained, and it is not known whether he has a representative who could speak on his behalf.
Prosecutors argue that to avoid discovery; the company even allowed users to submit fictitious registrant information.
According to investigators, drug traffickers and cybercriminals were attracted to Legkodymov and his business because of its anonymity.
Assistant State Attorney Kenneth Polite, in charge of the Department of Justice’s Criminal Division, announced charges and arrest.
Polite noted that the international investigation is a significant step in the federal government’s efforts to stop illegal activity throughout the cryptocurrency ecosystem.
Not to mention, the Treasury Department worked with French police authorities to pinpoint Bitzlat’s alleged illegal activity, which U.S. officials claimed was evidence of international cooperation in removing dishonest players from the cryptocurrency market.
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