Crypto exec arrested in Miami, accused of ‘vast’ $700M money laundering operation

MIAMI – Federal brokers in Miami arrested the founding father of a cryptocurrency change Tuesday evening, accusing him of operating a “huge” cash laundering operation, the U.S. Division of Justice introduced Wednesday.

Anatoly Legkodymov, 40, a Russian nationwide who resides in Shenzhen, China, was set to be arraigned in federal courtroom in Miami Wednesday afternoon.

Legkodymov is a senior govt and majority shareholder of the Hong Kong-based crypto change Bitzlato, which prosecutors stated “grew to become a haven for felony proceeds and funds meant to be used in felony exercise.”

The corporate not implement required anti-money laundering safeguards and required solely minimal identification from its customers, even allowing customers to produce data belonging to “straw man registrants,” folks serving as cowl for the customers, prosecutors stated.

They stated Legkodymov ran Bitzlato from Miami in 2022 and 2023.

Prosecutors allege that Bizlato’s largest counterparty in crypto transactions was Hydra Market, which prosecutors described as “an nameless, illicit on-line market for narcotics, stolen monetary data, fraudulent identification paperwork and cash laundering companies that was the biggest and longest operating darknet market on the planet.”

Hydra customers, in response to prosecutors, exchanged greater than $700 million in cryptocurrency with Bizlato, both immediately or by way of intermediaries, till U.S. and German authorities shuttered Hydra final April.

Prosecutors additionally stated Bizlato obtained greater than $15 million in ransomware proceeds and stated its clients “routinely used the corporate’s customer support portal to request help for transactions with Hydra, which Bitzlato usually offered and admitted in chats with Bitzlato personnel that they had been buying and selling underneath assumed identities.”

“Legkodymov and Bitzlato’s different managers had been conscious that Bitzlato’s accounts had been rife with illicit exercise and that lots of its customers had been registered underneath others’ identities,” federal prosecutors stated in a information launch. “As an example, on Could 29, 2019, Legkodymov used Bitzlato’s inner chat system to put in writing to a colleague that Bitzlato’s customers had been ‘recognized to be crooks,’ utilizing others’ identification paperwork to register their accounts. Legkodymov was repeatedly warned by colleagues that Bitzlato’s buyer base consisted of ‘addicts who purchase medicine at Hydra’ and ‘drug traffickers.’”

One senior govt burdened that Bizlato ought to solely “nominally” fight drug sellers, to be able to keep away from “hurting the corporate’s backside line,” officers stated.

Prosecutors stated whereas Bizlato claimed to not settle for customers from the U.S., it did “substantial enterprise” with American clients.

Legkodymov was charged with conducting an unlicensed cash transmitting enterprise. He might withstand 5 years in jail.

“In the present day’s actions ship the clear message: whether or not you break our legal guidelines from China or Europe — or abuse our monetary system from a tropical island — you’ll be able to anticipate to reply on your crimes inside a United States courtroom,” Deputy Lawyer Common Lisa Monaco stated in a press release, an obvious reference to the arrest final month within the Bahamas of Sam Bankman-Fried, the previous CEO of failed cryptocurrency agency FTX.

Authorities in France are additionally taking their very own enforcement actions, in response to the DOJ.