Security News > 2023 > January > Bitzlato crypto exchange seized for ransomware, drugs money laundering
The U.S. Department of Justice arrested and charged Russian national Anatoly Legkodymov, the founder of the Hong Kong-registered cryptocurrency exchange Bitzlato, with helping cybercriminals allegedly launder illegally obtained money.
Because of "Deficient know-your-customer procedures, Bitzlato allegedly became a haven for criminal proceeds and funds intended for use in criminal activity," the DOJ said.
Hydra Market users have exchanged over $700 million in cryptocurrency with Bitzlato, directly or using intermediaries, and more than $15 million in what the DOJ tagged as ransomware proceeds.
Legkodymov and other Bitzlato managers were also allegedly aware that illicit activity was widespread across Bitzlato accounts and that many users registered their accounts using stolen identities.
Today, the U.S. Department of the Treasury's Financial Crimes Enforcement Network also designated the Bitzlato crypto exchange as a "Primary money laundering concern" in connection with illicit Russian finance.
"Bitzlato plays a critical role in laundering Convertible Virtual Currency by facilitating illicit transactions for ransomware actors operating in Russia, including Conti, a Ransomware-as-a-Service group that has links to the Government of Russia," FinCEN said.
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