Dirty money was laundered on the cryptocurrency exchange. Founder facing allegations

Dirty money was laundered on the cryptocurrency exchange.  Founder facing allegations

American authorities took over the Bitzlato cryptocurrency exchange and arrested its co-founder, accusing the company of fueling a “high-tech axis of crime.”

The United States Department of Justice has charged Anatoly Legkodymov, a Russian citizen living in China, with running a company that supported criminal activities. The man was arrested in Miami.

Money laundering on the cryptocurrency exchange

According to American investigators, Bitzlato processed more than $700 million in illicit funds, breaking rules designed to thwart money laundering.

“Cryptocurrency trading institutions are not above the law, and their owners are not beyond our reach,” U.S. Attorney Breon Peace said at a news conference Wednesday announcing the arrest.

US prosecutors accuse the company of cooperating with criminals as a no-questions-asked cryptocurrency exchange and, as a result, collecting deposits worth hundreds of millions of dollars. Since 2018, the Hong Kong-registered exchange has processed approximately $4.5 billion worth of cryptocurrency transactions.

Anonymous cryptocurrency transactions

“The company required minimal identification from its users, making it a haven for criminal proceeds and funds intended for use in criminal activities,” prosecutors said.

Bitzlato authorities, according to investigators, were fully aware of the problems, citing an internal document describing Bitzlato as handling “dirty money” without standard customer verification procedures.

In addition, the exchange was allegedly closely linked to Hydra Market, a darknet black market for drugs, money laundering and stolen financial information that international authorities closed last year.

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