Bitzlato Crypto Exchange Founder Arrested By US DOJ
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Anatoly Legkodymov, majority owner and founder of the Blitzlato crypto exchange, has now been arrested by the US Department of Justice (DOJ). The charges of the arrest are in regard to allegations of his various operations of “money transmitting business” that allowed for the transmission and transport of “illicit funds.” The DOJ went further, stating that it had failed to meet the regulatory safeguards the US has put in place, of which includes the anti-money laundering requirements.
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Another One Bites The Dust
According to the US DOJ, the Bitzlato exchange had managed to process an excess of $700 million in various illegal funds. The DOJ states that this allowed various criminals to gain illegal profits from operations such as drug trafficking and ransomware.
As for why the US DOJ is involved, the agency states that the exchange had a significant portion of its business be done via customers based in the US. Another critical piece of information is that the Blitzlato exchange representatives allegedly advised its users that it’s quite possible for Blitzlato to transfer funds to financial institutions within the US.
Not Even Bothering To Be Subtle
The firm is registered in Hong Kong officially, and was as brazen as to advertise itself as a “no-questions-asked” crypto exchange. Blitzlato went further, claiming that they have no need for either selfies or passports for their customers to do business.
With that in mind, there is little surprise that the US DOJ deemed their know your customer (KYC) protocols to be deficient. Furthermore, the US DOJ used this information to claim the Bitzlato exchange to be a criminal haven, with the funds and proceeds of the exchange intended for criminal activity above all else.
Lisa Monaco stands as the Deputy Attorney General of the US DOJ. In a public statement, Monaco explained that Legkodymov’s arrest has managed to significantly harm the illegal crypto trading space.
A Constant Battle
As for the charges themselves, Anatoly Legkodymov has been charged with the operation of a money-transmitting business without official licensing. The sentence for such a crime could be as much as five years in prison.
Kenneth Polite stands as one of the US DOJ’s assistant attorneys within its criminal division. They gave a public statement about the matter. He commended the tremendous efforts of the National Cryptocurrency Enforcement Team, particularly in the disruption of the Bitzlato exchange. He emphasized that the arrest of the defendant is a show that the US DOJ will maintain its cooperation with both domestic and foreign entities in order to combat crypto crime outside of US borders.
As sad as it is, technology that allows for quick and easy transfer of funds isn’t always used for the most noble of purposes. Cryptocurrencies have done much for the world at large, and one of those things is an increase in cybercrime thanks to the idea of “untraceable” currencies that hold value. Time will tell if this ever decreases, but as long as there is money, there will be those that want more of it, and of those, there will be those that don’t care about the law.
