US Authorities arrest HongKong based Crypto Exchange

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By Degen Lipsa

On Tuesday, the U.S. government detained Anatoly Legkodymov, a Russian national and co-founder of the Hong Kong-based cryptocurrency exchange Bitzlato, on the grounds that it had assisted in the movement of illegal funds. According to the unsealed lawsuit, Bitzlato is accused of operating a money-transmitting company that enabled illegal fund flows, including money-laundering, totalling more than $700 million in revenues for several cybercriminals.

Anatoly Legkodymov, a Russian citizen and the inventor of the cryptocurrency exchange Bitzlato, has been detained, according to deputy attorney general Lisa Monaco.

The Russian citizen Anatoly Legkodymov, 40, who resides in Shenzhen, China, was detained in Miami overnight and was scheduled to show up in court there the following day, according to a press conference by the Department of Justice.According to court records, Legkodymov founded and holds a majority stake in the Hong Kong-registered company Bitzlato, which markets itself as requiring little to no user identity.

Hydra, a secretive, illegal online market place on the “darknet” that was shut down by US and German authorities last year, was Bitzlato’s main trading partner. When selling illegal drugs, stolen credit card information, false money, and identity documents, Hydra used encryption to conceal the identities of people engaged.

According to US Deputy Attorney General Lisa Monaco, “the Department of Justice dealt a serious blow to the cryptocrime ecosystem today.” The Chinese money laundering operation Bitzlato, which powered a high-tech axis of cryptocrime, was disrupted and its founder, Russian national Anatoly Legkodymov, was arrested over the course of one night thanks to the Department’s collaboration with important domestic and international partners.

The actions of today, according to Monaco, “send a clear message: you can expect to answer for your crimes inside a United States courtroom, whether you break our laws from China or Europe — or misuse our financial system from a tropical island.”According to German federal police, the Hydra marketplace had over 19,000 vendor accounts and about 17 million client accounts when it was shut down in April 2022.

Websites that can only be accessed with particular software or authorisations are included in the secret “darknet,” guaranteeing users’ anonymity. International law enforcement has intensified its pressure on these networks as a result of a spike in usage during the coronavirus pandemic.Attorney for the Eastern District of New York Breon Peace stated, “As alleged, Bitzlato presented itself to criminals as a no-questions-asked cryptocurrency exchange, and as a result, collected hundreds of millions of dollars’ worth of deposits.”

The accused is currently making up for the negative role that his business played in the cryptocurrency ecosystem.Bitzlato is believed to have developed into a shelter for illegal proceeds and money meant for criminal activity.Legkodymov allegedly wrote to a coworker in May 2019 through Bitzlato’s internal chat system that some users were “known to be fraudsters” who registered accounts using other people’s identification documents.

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