Former crypto exchange CEO Anatoly Legkodymov has pleaded guilty to federal charges for his role in illegally transporting and sending hundreds of millions of dollars in illicit funds.
The US Department of Justice (DOJ) says Legkodymov, the founder of crypto exchange Bitzlato, admitted to operating an unlicensed money transmission business in a federal court in Brooklyn this week.
The DOJ say that Bitzlato became a haven for criminal proceeds and funds because the company did not implement proper know-your-customer (KYC) procedures.
The exchange is also said to have facilitated more than $700 million in crypto transactions with users of the drug bazaar Hydra Market, which closed in April 2022.
“Bitzlato’s largest counterparty in cryptocurrency transactions was Hydra Market, an online marketplace for narcotics, stolen financial information, fraudulent identification documents and money laundering services, which was the largest and longest-running darknet market in the world.”
Legkodymov was arrested in January as authorities targeted Bitzlato with money laundering charges.
Say U.S. Attorney for the Eastern District of New York Breon Peace
“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 eager to take advantage of his lax controls over illegal monetary transactions.
The defendant may have believed he was operating from a safe haven abroad for his ‘No Questions Asked’ clearinghouse, but this prosecution and conviction proves otherwise.”
As part of the plea deal, Legkodymov agreed to dissolve Bitzlato and release any claim over an estimated $23 million in seized assets from the platform.
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