Anatoly Legkodymov, a Russian co-founder of the cryptocurrency exchange Bitzlato, entered a guilty plea to accusations of money laundering.
On December 6, 2023, the U.S. Department of Justice (DoJ) released a press statement stating that Legkodymov entered a guilty plea to running a money-transmitting company that “transported and transmitted” more than $700 million in unlawful cash.
According to the DoJ, Bitzlato served as a “safe haven for ransomware criminals” and a major supplier for buyers and sellers on the dark web. Legkodymov will disband Bitzlato and give up all claim to the $23 million in cryptocurrency exchange assets that were seized as part of the plea deal. According to U.S. Attorney Breon Peace:
“Legkodymov’s guilty plea today confirms that he was well aware that Bitzlato, his cryptocurrency exchange, was being used like an open turnstile by criminals eager to take advantage of his lax controls over illicit money transactions.”
January 2023 saw the arrest of Bitzlato’s Legkodymov on suspicion of money laundering, not long after the U.S. Department of Justice declared a major global crypto enforcement operation.
Bitzlato is thought to have had ties to the online drug market known as Hydra Market, which authorities claim was involved in money laundering, drug trafficking, the sale of financial information obtained unlawfully, and the creation of false identities.
Bitzlato’s transactions were later connected to Binance, a cryptocurrency exchange whose founder Changpeng Zhao resigned in late November 2023 as part of a $4.3 billion settlement deal with U.S. officials, according to information later disclosed by the Treasury’s FinCEN.
Since then, Binance has taken the move to suspend from the exchange any accounts associated with transactions while additional inquiries are conducted.
