The co-founder of crypto exchange Bitzalto, Anatoly Legkodymov, has pleaded guilty in a New York court for processing over $700 million in illicit funds via his exchange.
According to the official release from the U.S. Department of Justice, the Bitzlato co-founder pleaded guilty to operating an unlicensed money-transmitting business through which he helped criminals in money laundering.
The illicitly transferred funds from Bitzlato include millions of ransomware while primarily operating for dark market purchasers and sellers. “Legkodymov operated a cryptocurrency exchange that was open for business to money launderers and other criminals. He profited from catering to criminals, and now he must pay the price,” said Assistant Attorney General Argentieri.
Bitzlato had Hydra Market as one of its biggest clients, which was a major darknet hub for trading narcotics, stolen data, and money laundering services. Hydra Market users reportedly processed more than $700 million of funds through Bitzlato until it was seized and shut down in April 2022 by the U.S. and German law enforcement agencies.
The investigation into Bitzlato was started after Hydra Market’s seizure, and it was found that the exchange had a deficient KYC procedure that allowed criminals to benefit and process illegally acquired funds. Legkodymov was arrested on January 19 in Miami as part of enforcement actions against Bitzlato.
As a part of a plea agreement, Legkodymov agreed to dissolve the Bitzlato exchange, and he does not have any claim on over $23 million of assets seized from the exchange.