Anatoly Legkodymov, Founder of Bitzlato Pleads Guilty to Operating Illicit Money Transmitting Business
The founder of crypto exchange Bitzlato, Anatoly Legkodymov, has pleaded guilty to charges related to operating a money transmitting business that facilitated the movement of illicit funds. This highlights Bitzlato’s role as a primary facilitator for dark market transactions and its lax controls over illicit money transactions.
Crypto Exchange Founder Oversees Millions In Illicit Funds
Legkodymov admitted to operating Bitzlato, which attracted criminals seeking a refuge for their activities. The crypto exchange, marketed as having minimal identification requirements, allegedly became a “safe haven for criminals” due to a lack of know-your-customer (KYC) procedures.
Bitzlato’s largest counterparty in cryptocurrency transactions was Hydra Market, a notorious online marketplace dealing in narcotics, stolen financial information, fraudulent identification documents, and money laundering services. Users exchanged over $700 million worth of cryptocurrency with Bitzlato, making it a key player in the illicit darknet market until Hydra Market’s shutdown in April 2022.
Authorities Claim Legkodymov Turned a Blind Eye
Deputy Attorney General Lisa O. Monaco emphasized the government’s commitment to disrupting cryptocrime and cited the takedown of Bitzlato’s infrastructure and seizure of its cryptocurrency earlier this year as part of ongoing efforts. According to the Department of Justice (DoJ), Bitzlato had a “no questions asked” clearinghouse approach that enabled criminals to exploit the exchange’s lax controls, leading to its downfall.
The case was jointly prosecuted by the United States Attorney’s Office for the Eastern District of New York and the National Cryptocurrency Enforcement Team (NCET), a unit dedicated to combating illicit cryptocurrency use.
Hot Take: Anatoly Legkodymov’s Guilty Plea Exposes Cryptocurrency Exchange’s Role in Illicit Activities
Anatoly Legkodymov’s guilty plea sheds light on the dark underbelly of the cryptocurrency industry. Bitzlato, once marketed as a crypto exchange with minimal identification requirements, became a hub for criminals due to its lack of know-your-customer procedures. The exchange’s lax controls allowed it to facilitate illicit transactions, particularly with Hydra Market, a notorious online marketplace involved in various illegal activities.
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