The U.S. Justice Department has brought charges against Anatoly Legkodymov, the founder of Hong Kong-registered cryptocurrency exchange Bitzlato, for facilitating a money transmitting business that allegedly processed over $700M of illicit funds, including more than $15M in ransomware proceeds, it said in a release Wednesday. Legkodymov, a Russian national and majority owner of Bitzlato, was arrested Tuesday evening in Miami, Florida and is set to be arraigned this afternoon in the U.S. District Court for the Southern District of Florida. Authorities in France as well as the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) are also taking enforcement actions as part of a coordinated international law enforcement action. "Today’s actions send the clear message: whether you break our laws from China or Europe—or abuse our financial system from a tropical island—you can expect to answer for your crimes inside a United States courtroom,” Deputy Attorney General Monaco said in a statement. The complaint alleged that Bitzlato lacked know-your-customer procedures -- marketing itself as requiring minimal identification from its users -- allowing the exchange to become a "haven for criminal proceeds and funds intended for use in criminal activity." Bitzlato's largest counterparty in crypto transactions featured Hydra Market, which the DoJ described as an "illicit online marketplace for narcotics, stolen financial information, fraudulent identification documents, and money laundering services that was the largest and longest running darknet market in the world." More than $700M in crypto was exchanged between Hydra Market users and Bitzlato, until Hydra was shut down in April 2022 by law enforcement in the U.S. and Germany. And while bitzlato claimed it did not accept U.S.-based users, the DoJ alleged it did "substantial business" with them. If Legkodymov proves guilty, he will face a maximum penalty of five years in prison. Earlier, bitcoin ( BTC-USD ) and ethereum ( ETH-USD ) slid ahead of the DoJ's "major" international crypto action.
