The Russian founder of the now-defunct Bitzlato cryptocurrency exchange pleaded guilty, almost 11 months after he was arrested in Miami earlier this year.
Anatoly Legkodymov (aka Anatolii Legkodymov, Gandalf, and Tolik), according to the US Department of Justice, admitted to operating an unlicensed money laundering business that enabled other criminal actors to launder their illicit proceeds. . He faces up to five years in prison.
“Legkodymov operates a cryptocurrency exchange that is open for business to money launderers and other criminals,” SAYS Acting Assistant Attorney General Nicole M. Argentieri of the Criminal Division of the Justice Department.
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“He made a profit from taking care of criminals, and now he has to pay the price.
Bitzlato, which serves as a safe haven for fraudsters and ransomware crews like Conti, is estimated to have received $2.5 billion in cryptocurrency between 2019 and 2023, more than half of which came from illegal and risky sources.
Prior to its removal from law enforcement, the Hong Kong-registered exchange also drew attention for its know-your-customer (KYC) procedures and marketed itself as a platform that required minimal registration information. -identified from its users. Some of its users are believed to have registered accounts using stolen identity documents.
The Department of Justice also singled out the Hydra darknet market as Bizlato’s largest counterpart in cryptocurrency transactions, where users have previously exchanged no less than $700 million worth of digital assets on the exchange.
Hydra is the world’s largest and longest running dark web marketplace for narcotics, stolen financial information, identity fraud documents, and money laundering services. It was dismantled by German and US authorities in April 2022.
“Legkodymov’s guilty plea today proves that he knew that Bitzlato, his cryptocurrency exchange, was used like an open turnstile by criminals eager to take advantage of his poor control over transactions of illegal money,” said US Attorney Breon Peace for the Eastern District. in New York.