US DoJ announces global crypto enforcement action

The founder of the crypto company Bitzlato, Anatoly Legkodymov, was arrested after the U.S. Department of Justice announced a significant worldwide crypto enforcement action.

Bitzlato’s resources were confiscated by the DoJ

U.S. Deputy Attorney General Lisa Monaco announced on Jan. 18 that she had taken enforcement actions against Bizlato in coordination with France. Including the seizure of Bitzlato’s website and the company’s designation as a “primary money laundering concern” linked to illicit Russian finance.

To punish Bitzlato for running a money transmission business that moved and transferred criminal monies and that failed to meet U.S. regulatory standards, the Department of Justice collaborated with the Treasury Department and French law enforcement, according to Monaco.

FBI agents detained Legkodymov, a Russian national residing in China, on Jan. 17 in Miami as part of the case against Bitzlato. He will be charged with a crime in the Southern District of Florida’s U.S. District Court.

According to the U.S. authorities, the criminal lawsuit against Bitzlato was based on the company being a “crucial financial resource” for the Hydra darknet marketplace, allowing users to launder money from assaults like ransomware.

“Hydra Market customers transferred more than $700 million in bitcoin with Bitzlato, either directly or through middlemen, until German law officials and we shut down Hydra Market in April 2022. In addition, Bitzlato got more than $15 million in ransomware earnings.”

U.S. DoJ.

The enforcement operation was a concerted effort across Europe and the U.S. to seize numerous Bitzlato resources, including the company’s servers, and to detain the creator.

The National Crypto Enforcement Team was founded in October 2021, and Monaco described the case as the “most important enforcement action” against an exchange since that time.

Kenneth Polite, an assistant attorney general in charge of the criminal division of the Department of Justice, stated that American officials were “just getting started” in their pursuit of comparable companies that helped facilitate money laundering.

However, Monaco cautioned against people perpetrating crimes against the American financial system “from a tropical island” without directly commenting on the ongoing prosecution against crypto exchange FTX and its former CEO, Sam Bankman-Fried.