Bitzlato Co-Founder Admits Guilt in U.S. Crypto Money Transmission Case

• Anatoly Legkodymov Pleads Guilty to Operating Unlicensed Money Transmitter
• Bitzlato Agrees to Dissolve and Release Claims on Seized Assets
• Bitzlato's Case Transferred to U.S. District Court for the Eastern District of New York
• Bitzlato Labeled as a Safe Haven for Fraudsters
• Plans to Reopen Bitzlato

Anatoly Legkodymov Pleads Guilty to Operating Unlicensed Money Transmitter

Anatoly Legkodymov, co-founder of the Hong Kong-based cryptocurrency exchange, Bitzlato, has accepted responsibility for conducting an unauthorized money transmitter operation. This is in connection to claims that the exchange was involved in money laundering activities resulting from ransomware attacks, illegal drug sales, and other criminal activities, according to U.S. authorities.

Bitzlato Agrees to Dissolve and Release Claims on Seized Assets

Being a predominant shareholder in Bitzlato, Legkodymov has consented to disband the exchange and relinquish claims on approximately $23 million in confiscated assets, as stated by a press release from the U.S. Department of Justice (DOJ). In January, the U.S. government imposed sanctions on Bitzlato following allegations from the DOJ and Treasury Department that the exchange laundered roughly $700 million. Subsequently, Treasury's Financial Crimes Enforcement Network labelled the exchange as a significant concern regarding money laundering, effectively severing its ties to the global financial system.

Bitzlato's Case Transferred to U.S. District Court for the Eastern District of New York

After being arrested in Florida, the case against Legkodymov was transferred to the U.S. District Court for the Eastern District of New York. It was later reported by the European Union's police body, Europol, that Bitzlato had laundered more than $1 billion. According to the DOJ, Bitzlato's largest trading partner was the darknet marketplace Hydra$0.820 -3.62%, which facilitated transactions involving counterfeit ID information, stolen financial details, and money laundering.

Bitzlato Labeled as a Safe Haven for Fraudsters

In a public statement, Deputy Attorney General Lisa Monaco dubbed Bitzlato a refuge for criminals, including fraudsters and thieves. She stated that the department is committed to disrupting the cryptocrime ecosystem using all available resources, including criminal prosecution. Back in January, the department alongside its partners took down Bitzlato's infrastructure and seized its cryptocurrency. The recent conviction of Bitzlato's founder is the latest result of their ongoing efforts.

Plans to Reopen Bitzlato

Another co-founder of Bitzlato, Anton Shkurenko, made a statement at the end of January about plans to reopen the exchange. However, it was reported that the main website still featured a message stating that it had been confiscated by French prosecutors as of December 6th.

Edited by Jonathan Stoker