Source:https:\/\/techcrunch.com\/2023\/01\/18\/bitzlato-doj-arrest-crypto\/<\/a><\/br>
\nDOJ charges founder of crypto exchange Bitzlato for processing $700M of illegal funds<\/br>
\n2023-01-20 21:44:55<\/br><\/p>\n

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In a press conference on Wednesday, the U.S. Department of Justice announced it has arrested<\/a> Anatoly Legkodymov, founder of crypto exchange Bitzlato, for allegedly processing over $700 million of illicit funds.<\/p>\n

\u201cOvernight, the Department worked with key partners here and abroad to disrupt Bitzlato, the China-based money laundering engine that fueled a high-tech axis of cryptocrime, and to arrest its founder, Russian national Anatoly Legkodymov,\u201d said Deputy Attorney General Lisa O. Monaco. \u201cToday\u2019s actions send the clear message: Whether you break our laws from China or Europe \u2014 or abuse our financial system from a tropical island<\/a> \u2014 you can expect to answer for your crimes inside a United States courtroom.\u201d<\/p>\n

According to the DOJ, Bitzlato allowed users to trade cryptocurrencies without verifying their identity. The Hong Kong-registered exchange advertised itself to customers by saying that \u201cneither selfies nor passports [are] required.\u201d The government said that this lack of know-your-customer procedures turned Bitzlato into a hotbed for criminal activity.<\/p>\n

U.S. government regulators have been cracking down on the crypto space. Coinbase, one of the most popular crypto exchanges, was recently fined $50 million<\/a> by New York state regulators for failing to conduct adequate background checks. According to a government filing<\/a>, Coinbase employed third-party contractors to handle a backlog of more than 100,000 unreviewed transaction monitoring alerts, but Coinbase failed to conduct quality control measures, so it turned out that much of this contracted work was riddled with errors. As a result of these errors, regulators wrote that Coinbase failed to report potential instances of money laundering, narcotics trafficking and CSAM-related activity to authorities.<\/p>\n

Meanwhile, FTX founder Sam Bankman-Fried was arrested<\/a> on federal charges of defrauding investors after his $32 billion company imploded and filed for bankruptcy. Bankman-Fried continues to assert he is not guilty<\/a> and even started a Substack<\/a> to defend himself, though his former associates like FTX co-founder Gary Wang and Alameda CEO Caroline Ellison have pled guilty<\/a> to federal charges.<\/p>\n

Events like FTX\u2019s bankruptcy shook the crypto industry, but longtime<\/a> crypto<\/a> insiders<\/a> didn\u2019t seem to know what Bitzlato was before the DOJ\u2019s announcement. According to data of known wallets from Arkham, a crypto intelligence tool, wallets associated with Bitzlato contain just over $11,000; at its peak, they contained over $6 million, making Bitzlato a very small player in the industry.<\/p>\n

If convicted, Legkodymov could face up to five years in prison.<\/p>\n

\u201cThe FBI and our partners remain steadfast in our commitment to keeping cryptocurrency markets \u2014 as with any financial market \u2014 free from illicit activity,\u201d said Michael J. Driscoll, an assistant director with the FBI\u2019s New York field office. \u201cToday\u2019s action should serve as an example of this commitment as Legkodymov will now face the consequences of his actions in our criminal justice system.\u201d<\/p>\n<\/p><\/div>\n

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Tech, Technology<\/br>
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\nSource:https:\/\/techcrunch.com\/2023\/01\/18\/bitzlato-doj-arrest-crypto\/<\/a><\/br><\/br><\/p>\n","protected":false},"excerpt":{"rendered":"

Source:https:\/\/techcrunch.com\/2023\/01\/18\/bitzlato-doj-arrest-crypto\/ DOJ charges founder of crypto exchange Bitzlato for processing $700M of illegal funds 2023-01-20 21:44:55 In a press conference on Wednesday, the U.S. Department of Justice announced it has arrested Anatoly Legkodymov, founder of crypto exchange Bitzlato, for allegedly processing over $700 million of illicit funds. \u201cOvernight, the Department worked with key partners here […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"nf_dc_page":"","om_disable_all_campaigns":false,"pagelayer_contact_templates":[],"_pagelayer_content":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[17,8],"tags":[],"class_list":["post-14555","post","type-post","status-publish","format-standard","hentry","category-tech","category-technology"],"yoast_head":"\n