- U.S. Department of Justice Closes Bitzlato Exchange – The U.S. Department of Justice has closed the cryptocurrency exchange Bitzlato and arrested its owner, Anatoly Legkodymov.
- FBI Accusations – The FBI alleges that the Hong Kong-based exchange was part of a large illicit cryptocurrency network designed to circumvent sanctions, launder money and conceal crimes.
- Criminal Actors Warned – Law enforcement warned criminal actors that they will be held accountable for their actions regardless of their location.
U.S. Department of Justice Closes Bitzlato Exchange
The U.S. Department of Justice (DOJ) has announced the closure of the Bitzlato cryptocurrency exchange, along with the FBI’s arrest of the exchange’s owner, Anatoly Legkodymov. In a live stream hosted on January 18, representatives from the law enforcement bureau revealed that the Hong Kong-based exchange was allegedly a part of a large illicit cryptocurrency network designed to circumvent sanctions, launder money and conceal crimes. “Legkodymov operated Bitzlato as a high-tech financial hub that, in his own words, catered to ‘known crooks,'” the DOJ statement reads. “Bitzlato failed to implement safeguards required by U.S. law – safeguards that enable authorities to detect and investigate financial crimes.”
The DOJ alleges that Bitzlato facilitated more than $700 million in transactions involving illicit funds from 2018-2022, but at the time of the live stream, Bitzlatos’ tagged wallets only had $11,000 on them, compared to a peak of $6 million. In addition to this discrepancy in volume when compared to other entities accused or charged with similar activities such as Three Arrows Capital and related entities; officials warned criminal actors that they must answer to U.S law enforcement regardless of their location or residence: “Whether you break our laws from China or Europe or abuse our financial system from a tropical island—you can expect to answer for your crimes inside a United States courtroom,” said by DOJ representatives during their live stream announcement regarding Bitzlato’s closure .