Crypto Exchange Founder Pleads Guilty To Operating ‘Safe Haven’ For Criminals

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Discover how founder of crypto exchange Bitzlato Anatoly Legkodymov lax controls made it a hub for dark market transactions.

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By Ciaran Lyons 10 December 2023, 21:18 GMT+0000

Updated by Ciaran Lyons 10 December 2023, 21:20 GMT+0000 Join our Trading Community on Telegram Share on Twitter Share on Email Share on Linkedin

In Brief

Anatoly Legkodymov, admits guilt in illicit fund movement, spotlighting lax controls in illicit transactions.
Bitzlato, an alleged refuge for criminals, facilitated $700 million in darknet transactions until April 2022.
Deputy Attorney General Monaco stresses dismantling crypto crime, emphasizing consequences for lax controls.
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Anatoly Legkodymov, the founder of crypto exchange Bitzlato pleaded guilty to charges related to operating a money transmitting business that facilitated the movement of illicit funds.
The charges highlighted Bitzlato’s role as a primary facilitator for dark market transactions. Furthermore, his lax controls over illicit money transactions.
Legkodymov admitted to the operation of Bitzlato, which attracted criminals seeking a refuge for their activities.
Meanwhile, the crypto exchange, marketed as having minimal identification requirements, allegedly became a “safe haven for criminals” due to a lack of know-your-customer (KYC) procedures.
However, Bitzlato’s largest counterparty in cryptocurrency transactions was Hydra Market. This is a notorious online marketplace dealing in narcotics, stolen financial information, fraudulent identification documents, and money laundering services.
Users exchanged over $700 million worth of cryptocurrency with Bitzlato. This makes it a key player in the illicit darknet market until Hydra Market’s shutdown in April 2022.
However, deputy Attorney General Lisa O. Monaco emphasized the government’s commitment to disrupting cryptocrime. She cited the takedown of Bitzlato’s infrastructure and seizure of its cryptocurrency earlier this year as part of ongoing efforts.
Learn more: How To Identify a Scam Crypto Project
According to the DoJ, Bitzlato had a “no questions asked” clearinghouse approach.
This allegedly enabled criminals to exploit the exchange’s lax controls, is the primary cause of its downfall.
The case was jointly prosecuted by the United States Attorney’s Office for the Eastern District of New York and the National Cryptocurrency Enforcement Team (NCET). This is a unit dedicated to combating illicit cryptocurrency use.
Learn more: 15 Most Common Crypto Scams To Look Out For
In adherence to the Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. This news article aims to provide accurate, timely information. However, readers are advised to verify facts independently and consult with a professional before making any decisions based on this content.

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Ciaran Lyons READ FULL BIO Ciaran is a cryptocurrency journalist based in Sydney, Australia. He particularly enjoys writing about CBDC developments and the practical implementations of cryptocurrency in real-world scenarios. Ciaran is a cryptocurrency journalist based in Sydney, Australia. He particularly enjoys writing about CBDC developments and the practical implementations of cryptocurrency in real-world scenarios. READ FULL BIO Sponsored Sponsored