Anatoly Legkodymov, the co-founder of Hong Kong-based cryptocurrency exchange Bitzlato, pleaded guilty to running an unlicensed money transfer company accused of handling funds from ransomware attacks, illegal drug trade and other crimes, U.S. officials announced on Wednesday.
A press release from the U.S. Department of Justice (DOJ) stated that the exchange’s majority shareholder Legkodymov “agreed to dissolve Bitzlato” and lift its pursuit of approximately $23 million in seized assets.
Bitzlato was sanctioned by the U.S. government in January this year when the U.S. Treasury Department and Justice Department accused it of laundering approximately $700 million worth of funds, and the Treasury Department's Financial Crimes Enforcement Network designated the exchange a "major money laundering concern," which functionally blocked it from the global financial system.
Police arrested Legkodymov in Florida, but his case was later transferred to the U.S. District Court for the Eastern District of New York.
Europol, the European Union's police entity, later accused Bizrato of laundering more than $1 billion worth of funds. The little-known exchange’s biggest counterparty was Hydra, a dark web marketplace that allowed fake ID information, stolen financial information and money-laundering transactions, the Justice Department said.
Deputy Justice Minister Lisa Monaco called Bitzlato a "haven for fraudsters, thieves and other criminals" in a statement.
"We are using every tool at our disposal - including criminal prosecution - to disrupt and disrupt the crypto-criminal ecosystem. In January, the department and our partners destroyed Bitzlato's infrastructure and seized its cryptocurrency. Today's conviction of Bitzlato's founder is the latest culmination of our efforts," she said.