US authorities on Wednesday said they had arrested the owner of China-based cryptocurrency exchange Bitzlato for alleged money laundering, hailing the move as a global “blow to the cryptocrime ecosystem.”
Anatoly Legkodymov, 40, a Russian living in Shenzhen, China, was held by police in Miami overnight and was due to appear in court in the city during the day, the US Department of Justice told a news conference.
Legkodymov was detained for his alleged role in transmitting US$700 million in illicit funds, the department said, adding that criminals used the exchange as a haven for narcotics trading and selling stolen financial information.
Photo: AP
Legkodymov is the majority shareholder of Hong Kong-registered Bitzlato, which has marketed itself as requiring minimal identification from users, court documents said.
Bitzlato’s largest partner for transactions was Hydra, an anonymous Dark Net marketplace that was shut down by US and German authorities last year.
Hydra sold illegal drugs, stolen credit card data, counterfeit currency and fake identity documents, masking the identities of those involved using encryption.
Photo: REUTERS
“Today the Department of Justice dealt a significant blow to the cryptocrime ecosystem,” US Deputy Attorney General Lisa Monaco told reporters in Washington.
“Overnight, 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,” she said.
“Today’s actions send the clear message: Whether you break our laws from China or Europe — or abuse our financial system from a tropical island — you can expect to answer for your crimes inside a United States courtroom,” Monaco said.
When it was closed in April last year, Hydra had about 17 million customer accounts and more than 19,000 vendor accounts, German federal police said.
The Dark Net includes Web sites that can be accessed only with specific software or authorizations, ensuring anonymity for users.
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