US nabs Russian crypto lord of Bitzlato

In one of the biggest international cryptocurrency enforcement actions, the United States' Department of Justice arrested Bitzlato founder Anatoly Legkodymov for being involved in crypto crimes.

New Delhi, Jan 21: The cryptocurrency landscape in the US is facing quite a challenge as several of the exchanges and individuals from the country have been caught in scams. It has been just a few months since one of the biggest crypto scam of the world 'FTX scam' happened and now the arrest of Bitzlato founder is in the news. The major victims are still the users who trusted the crypto companies for lucrative returns.

In one of the biggest international cryptocurrency enforcement actions, the United States' Department of Justice (DOJ) arrested the founder of Bitzlato. The crypto exchange, according to DOJ sources, is heavily involved in facilitating crypto crime. Interestingly, it is a Chinese crypto exchange, not Binance of course. The company under fire was registered in Hong Kong and operating globally since 2016.

The DOJ has alleged that the arrested founder of Bitzlato was involved in servicing financial criminals. It was a joint effort from various government bodies that included the FBI, OFAC and the Financial Crimes Enforcement Network (FinCEN). These organizations have been working tirelessly to monitor suspicious activities among financial institutions.

Bitzlato fuelled darknet marketplaces

Accusing Bitzlato, the government agencies claim that not just that the crypto exchange fuelled darknet marketplaces but at the same time aided the process of ransomware attacks. The ransomware according to them is worth more than $700 million in direct and indirect illegal transfers. Most of these transactions took place from 2018 and till last year.

In its press conference, the US department said that coordinated operations like these against Bitzlato are the linchpins of international success against cybercrime. The arrested crypto lord has been recognized as Anatoly Legkodymov, a Russian but living in China. However, he was arrested in the US at Miami.

The US department is of the view that Legkodymov's cryptocurrency exchange, Bitzlato, not only did not follow the required anti-money-laundering safeguards but also permitting users to supply information belonging to straw man registrants. Overall, the major allegation against this crypto exchange is that it helped criminals, drug dealers with anonymous transfers.

Interestingly, although the action is against the Chinese crypto exchange and the arrested person is of Russian origin, a major portion of the press conference from the US Department was dedicated to condemning Russia. The representatives were heard accusing Russia for being the epicentre of cybercrime, money laundering etc, and of course the Ukraine war.