Bitzlato – Suspicion of money laundering: The co-founder of the cryptocurrency exchange Bitzlato, Anatoly Legkodymov, was recently arrested in the USA. The charge was money laundering. The website of Bitzlato https://bitzlato.com/ was deactivated.
Anatoly Legkodymov, the co-founder and main shareholder of the cryptocurrency exchange Bitzlato, was arrested in the USA on suspicion of money laundering. The Russian, who lives in China, is alleged to have transferred and laundered hundreds of millions of dollars.
The fact that the main shareholder and co-founder of the Hong Kong-registered cryptocurrency exchange Bitzlato was arrested is due to information from the US Department of Justice. After Bitzlato’s website was disabled, there is a reference to the service being taken over by French authorities “as part of a coordinated international law enforcement operation”.
Legkodymov could face several years in prison
Anatoly Legkodymov is accused of operating a “business of sending money without a licence”. This carries a penalty of up to five years in prison in the USA.
Bitzlato’s website was subsequently blocked. The prosecution claims that the cryptocurrency exchange Bitzlato has traded cryptocurrencies worth almost 5 billion US dollars since May 2018.
According to the US Department of Justice, the co-founder was arrested in Miami on Wednesday evening. The man is said to be a Russian citizen residing in China. The 40-year-old’s whereabouts in the US were not defined by the ministry.
Bitzlato: questionable client base?
According to Legkodymov’s own words to the US Department of Justice, Bitzlato’s clients are also “known crooks”.
According to the US Justice Department, all that was needed to use the crypto exchange Bitzlato was minimal identification of the customers. This apparently attracted numerous fraudsters and criminals who used the platform for illegal activities and money laundering.
According to the U.S. Treasury Department’s Financial Crimes Enforcement Network, Bitzlato is linked to illegal Russian financial transactions. Russian cybercriminals have been able to launder the funds from their thefts here without much trouble.
Branching out into the darknet at Bitzlato
The darknet marketplace “Hydra Market”, which used to be the highest-turnover criminal darknet marketplace in the world and was shut down by German and US investigators in April 2022, is said to have been the platform’s most important partner in cryptocurrency transactions.
According to the US Department of Justice, Hydra users transferred more than $700 million in cryptocurrencies through Bitzlato, either directly or through middlemen.
According to a statement from the US Department, French authorities removed Bitzlato’s digital infrastructure at the same time as the Russian’s arrest and worked with allies in Spain, Portugal and Cyprus, as well as the police organisation Europol.
Legkodymov’s arrest is reminiscent of the case of Sam Bankman-Fried, who was taken into custody in the Bahamas in December 2022. Bankman- Fried was the founder and CEO of the crypto platform FTX. At the end of 2022, he was arrested on suspicion of fraud and money laundering. Meanwhile, the former entrepreneur is awaiting trial in Palo Alto and must wear an electronic ankle bracelet.
Bitzlato: hardly any identification or verification of customers
The crypto exchange Bitzlato stated that it only requires simple identification from its users. Neither authentication via biometric images nor identity documents were required, the US judiciary said. As a result, the website attracted many criminals.
Investigators say the strike against Bitzlato and Legkodymovs is an important sign against cybercrime and corrupt crypto exchange platforms.
Why dubious crypto exchanges are so dangerous for investors
Bitcoin fraud poses a major threat to investors in the global financial sector. Because the markets are so new and cryptocurrencies so unpredictable, they are very tempting for fraudsters. Cryptocurrencies can be used for phishing, Ponzi, pump-and-dump, money laundering and other types of fraud.
Because of the enormous risk bitcoin scams pose to investors, caution and knowledge are essential. Investors should never rely on guarantees of high profits and should instead make sure that Bitcoin providers are licensed.
In the event of a cryptocurrency scam, our lawyers are ready to provide you with a free initial consultation.
Lawyer helps injured parties
If the suspicion is confirmed that a service provider such as Bitzlato is not acting properly and there is a possibility that you as a customer will come to financial harm, a lawyer will help you. In addition to filing a report with the police and the financial authorities on behalf of our clients, the operator of a crypto exchange can also be held legally liable.
Here, both the various possibilities of compensation and the claims against the financial service provider mentioned in the contract must be examined.
It is important to determine whether financial institutions can be held responsible in the event of an error in financial transactions. Financial institutions can be the target of claims for compensation, for example in the case of money laundering or other illegal acts.
If you are a customer of Bitzlato and are now concerned about your crypto assets, you should contact a reputable law firm immediately.
We offer you a free initial consultation:
- Give us the names and phone numbers of everyone you have spoken to.
- Send an e-mail to our lawyers and describe the details of the case.
- Tell us the amount of damages.
We will carry out a free initial assessment for you as a client of Bitzlato. We will also inform you as soon as possible if we think you have a good chance of recovering your losses.