Anatoly
Legkodymov,
a
co-founder
of
Hong
Kong-based
crypto
exchange
Bitzlato,
pleaded
guilty
to
operating
an
unlicensed
money
transmitter
tied
to
allegations
that
the
exchange
processed
funds
from
ransomware
attacks,
illicit
drug
deals
and
other
crimes,
U.S.
officials
announced
Wednesday.
Legkodymov,
a
majority
owner
in
the
exchange,
“agreed
to
dissolve
Bitzlato”
and
release
claims
over
some
$23
million
in
seized
assets,
a
U.S.
Department
of
Justice
(DOJ)
press
release
said.
Bitzlato
was
sanctioned
by
the
U.S
government
in
January,
when
the
Treasury
Department
and
DOJ
alleged
it
laundered
some
$700
million
worth
of
funds,
and
Treasury’s
Financial
Crimes
Enforcement
Network
designated
the
exchange
as
a
“primary
money-laundering
concern,”
which
functionally
blocked
it
off
from
the
global
financial
system.
Police
had
arrested
Legkodymov
in
Florida,
though
his
case
has
since
been
moved
to
the
U.S.
District
Court
for
the
Eastern
District
of
New
York.
European
Union
police
entity
Europol
later
alleged
that
Bitzlato
laundered
over
$1
billion
worth
of
funds.
The
little-known
exchange’s
largest
counterparty
was
darknet
marketplace
Hydra,
the
DOJ
said,
which
allowed
transactions
for
fake
ID
information,
stolen
financial
information
and
money
laundering.
In
a
statement,
Deputy
Attorney
General
Lisa
Monaco
called
Bitzlato
a
“safe
haven
for
fraudsters,
thieves
and
other
criminals.”
“We
are
dismantling
and
disrupting
the
cryptocrime
ecosystem
using
all
tools
available
–
including
criminal
prosecution,”
she
said.
“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.”
Another
co-founder
of
Bitzlato,
Anton
Shkurenko,
said
at
the
end
of
January
that
the
exchange
would
reopen,
though
its
main
website
still
displayed
a
notice
that
it
was
seized
by
French
prosecutors
as
of
Dec.
6.
