A Russian national was charged with money laundering in connection with a cryptocurrency operation that allowed criminals to mask the proceeds of illegal gambling and drug deals valued at $700 million.
(Bloomberg) — A Russian national was charged with money laundering in connection with a cryptocurrency operation that allowed criminals to mask the proceeds of illegal gambling and drug deals valued at $700 million.
Anatoly Legkodymov, founder of crypto exchange Bitzlato, was arrested Tuesday in Miami, the US Justice Department said at a press conference Wednesday. Bitzlato was a “critical financial resource” for the Hydra dark web market, the largest and longest-running such marketplace, Deputy Attorney General Lisa Monaco said at the conference.
Bitzlato processed more than $700 million in illegal funds, including millions of dollars in ransomware gains, according to a Justice Department statement. Legkodymov posted on an internal Bitzlato chat that the exchange’s users were “known to be crooks,” according to the US.
“These actions show not only the broad scope of the defendant’s alleged crimes but also the international net dropped by law enforcement to stop him and his business partners,” Monaco said.
Bitzlato has facilitated about $1 billion in crypto money laundering since 2019, according to Chainalysis, which specializes in tracking crypto transactions.
Read More: US, German Authorities Shut Down Largest Darknet Market
Legkodymov, 40, lives in Shenzhen, China, and Russia, according to the US. He is scheduled to appear in court Wednesday afternoon in the Southern District of Florida.
The charges follow the establishment of the National Cryptocurrency Enforcement Team, a DOJ squad created to fight the criminal use of crypto and recover the proceeds of those crimes. Monaco announced the formation of the team in October 2021 to probe and prosecute crypto cases, develop strategies for such investigations and identify areas to focus on, including professional money launderers and ransomware schemes.
Veteran cybersecurity prosecutor Eun Young Choi, who led the successful prosecution of the 2014 hack against JPMorgan Chase & Co., was named to lead the squad in February 2022. That crime saw hundreds of millions of dollars stolen by hackers and conspirators in more than a dozen countries.
Choi also argued the appeal in the case against Ross Ulbricht, the founder and chief administrator of the now-shuttered Silk Road underground virtual drug bazaar.
The case is US v. Anatoly Legkodymov, 23-m-17, US District Court, Eastern District of New York (Brooklyn).
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