Crypto Exchange Reportedly Handled Over $700M in Illicit Funds Before Justice Department Shut It Down

The U.S. Department of Justice and French authorities shut down a suspected money laundering destination for crypto criminals on Thursday.

On January 19, the The Ministry of Justice charged Anatoly Legkodymova Russian national and senior executive of Bitzlato, a Hong Kong-registered cryptocurrency exchange that operates globally, with “the conduct of a money transfer business that transported and transmitted illicit funds and failed to comply with U.S. regulatory safeguards, including anti-money laundering requirements.”

The Department of Justice claims that Bitzlato presented itself to criminals as a “no questions asked cryptocurrency exchange,” resulting in hundreds of millions of dollars in deposits.

Although Bitzlato has stated that it does not accept users from the United States, the Department of Justice alleges that the crypto platform has done a significant volume of business with customers based in the United States and the company’s customer service representatives have repeatedly informed users that they can transfer funds from US financial institutions.

Bitzlato’s biggest trading partner in cryptocurrency transactions was Hydra Market, an anonymous online marketplace for illegal goods such as narcotics, stolen financial information and money laundering services, according to the Ministry of Health. Justice.

Hydra Market users traded over $700 million in cryptocurrency with Bitzlato, either directly or through intermediaries, until Hydra Market was shut down by US law enforcement and German in April 2022, reports the DOJ.

In the Justice Department press release, the Federal Bureau of Investigation alleges that Legkodymov knowingly allowed Bitzlato to become a “perceived safe haven for funds” that were both used and resulted from various criminal activities. The FBI adds that Bitzlato promoted the need for users to provide little identification to use the platform and clarified that “neither selfies nor passports [are] obligatory.”

Cybercriminals have relied heavily on Bitzlato for money laundering services, according to Chainalysis. His research reveals that the exchange received over $2.3 billion in cryptocurrency between 2019 and 2023.

The platform’s shutdown could represent a crucial blow to the cryptocurrency industry.

“If cybercriminals cannot reliably convert the cryptocurrency generated by their activities into cash, the incentives to commit these crimes plummet,” reports Chainalysis.

Register now: Be smarter about your money and your career with our weekly newsletter

Don’t miss: Mark Cuban Predicts This Will Be Crypto’s “Next Possible Implosion” – Here’s How To Avoid It


#Crypto #Exchange #Reportedly #Handled #700M #Illicit #Funds #Justice #Department #Shut #Crypto

Related Articles

Back to top button