Source: AFP
The Russian founder of cryptocurrency exchange Bitzlato pleaded guilty on Wednesday to running a money transfer business that accepted illegal funds.
Anatoly Legkodymov, 41, also known as “Gandalf”, faces a maximum sentence of five years in prison, the Justice Ministry said in a statement.
As part of his plea deal, Legkodymov agreed to dissolve Hong Kong-based Bitzlato and waive any claim to $23 million in seized assets.
“Bizzlato advertised a safe haven for fraudsters, thieves and other money laundering criminals – but their business model didn’t take federal law enforcement into account,” said Deputy Attorney General Lisa Monaco.
According to court records, Bitzlato required little identification from its users and became “a haven for criminal proceeds and funds intended for use in criminal activities.”
“Legkodymov’s guilty plea today confirms that he was well aware that Bitzlato, his cryptocurrency exchange, was being used as an open turnstile by criminals seeking to exploit his lax controls on illicit money transactions,” said US Attorney Breon Peace.
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According to the Department of Justice, Bitzlato received millions of dollars worth of ransomware revenue.
Its biggest trading partner was Hydra Market, an anonymous, illegal online marketplace on the “dark web” that was shut down by US and German authorities last year.
The secret “dark web” includes websites that can only be accessed with specific software or authorizations, ensuring anonymity for users.
Hydra Market users have exchanged more than $700 million worth of cryptocurrencies with Bitzlato, according to US officials.
Legkodymov, who lived in Shenzhen, China, was arrested in Miami in January as part of an international operation that also included arrests, mainly of Russian and Ukrainian nationals, in Spain, Portugal and Cyprus.
Source: AFP