46% of tokens of the arrested Russian cryptocurrency exchange are linked to crime

According to Europol, 46% of the tokens of the arrested Russian cryptocurrency exchange Bitzlato are linked to criminal activity. As it became known, Bitzlato representatives did not adhere to the KYC (know-your-customer) policy or even the basic principles of verifying their users, which attracted fraudsters.

US law enforcement agencies are convinced that Bitzlato’s management was aware of the money laundering situation, but took no action to stop the illegal transactions. 46% of the digital assets that passed through the exchange amount to about $ 1.09 billion. According to experts, the platform could have made a profit of $ 2.1 billion. Europol managed to confiscate a part of Bitzlato’s funds — $ 19.5 million in cryptocurrency — on January 23.

In addition to the seized millions, Europol representatives in Spain arrested five people — Bitzlato's CEO, CFO, and Chief Marketing Officer. Two more executives of the platform were detained in Cyprus and the United States. In addition, law enforcement officers searched eight private homes of top executives and froze more than 100 accounts totaling $ 50 million. Investigators from Belgium, Cyprus, Portugal, Spain, and the Netherlands participated in the operation.

According to the US Deputy Attorney General, the Bitzlato exchange was a «critical financial resource» for the black market on the darknet, the Russian Hydra marketplace. In total, Hydra accounted for 80% of the global darknet market revenue in 2021. The black marketplace of the terrorist state was used to trade in fake documents, stolen databases, banned substances, weapons and other illegal goods.