Asia

Russia’s Anatoly Legkodymov arrested in Miami, Florida; Bitzlato founder failed to maintain anti-money laundering program?

Originally from Russia, Anatoly Legkodymov, 40, is a resident of Shenzhen, China. He is the founder and majority owner of Bitzlato Ltd., a cryptocurrency exchange registered in Hong Kong with links to Florida, United States and other parts of the world.

Bitzlato conducted more than $700 million of cryptocurrency transactions with Hydra Market, a darknet marketplace for stolen financial information, fraudulent identifications, money laundering services and narcotics. Through Bizlato, Hydra Market transmitted more than $15 million in ransomware.

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Colleagues repeatedly warned Legkodymov that Bitzlato’s customer base consisted of drug traffickers and addicts who buy drugs at Hydra Market. However, he allegedly failed to maintain an anti-money laundering program at Bitzlato.

Between 2018 and 2022, Bitzlato’s illegal transactions amounted to more than $700 million in direct and indirect exchanges. In 2022, he administered Bislato from Miami, Florida.

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On May 29, 2019, Legkodymov used Bitzlato’s internal chat system to write to a colleague that the cryptocurrency exchange’s users were known to be crooks who use others’ identity documents to register their accounts. Bitzlato received more than $15 million in ransomware proceeds.

In April 2022, authorities from Germany and the U.S. shut down Hydra Market. Legkodymov received reports reflecting substantial traffic to Bitzlato’s website from Internet Protocol addresses based in the U.S., including over 250 million such visits in July 2022.

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On January 17, 2023, Legkodymov was arrested at a family home in Miami while he was on vacation. Working with the European Union Agency for Law Enforcement Cooperation (Europol) and partners in Cyprus, Portugal and Spain, authorities in France dismantled Bitzlato’s digital infrastructure, seized its cryptocurrency and took other enforcement actions on the same day.

On January 18, 2023, Legkodymov appeared in federal court in Miami. On January 20, 2023, he will have a detention hearing in the same court.

In a criminal complaint by federal prosecutors in Brooklyn, New York City, New York, USA, Legkodymov was charged with conducting an unlicensed money-transmitting business. If convicted, he faces a maximum penalty of five years in jail.

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