Founder of Bitzlato crypto exchange accused of laundering $ 700 million in darknet

US law enforcement officials have announced the arrest of the main shareholder and co-founder of the Hong Kong-based cryptocurrency exchange Bitzlato Ltd. Anatoly Legkodymov is accused of laundering $ 700 million. The US authorities claim that Legkodymov’s crypto exchange has been concealing profits from illegal gambling and drug trafficking for a long time.

Anatoly Legkodimov (better known by his nicknames Gandalf and Tolik) is a Russian citizen who has been living in China. The fraudster was captured in Miami, and on Wednesday, January 18, the U.S. Department of Justice filed formal charges against Legkodymov. Today, January 19, the 40-year-old Russian will appear in court in the Southern District of Florida.

«Institutions that trade in cryptocurrencies are not above the law, and their owners are not beyond our reach,» said U.S. Attorney Breon Pease. «Bitzlato collaborated with criminals and as a result received hundreds of millions of dollars in illegal deposits. The defendant is now paying the price for the criminal role his company played in the cryptocurrency ecosystem.»

According to Deputy Attorney General Lisa Monaco, the Bitzlato exchange was a «critical financial resource» for the black market in the darknet — the Russian Hydra marketplace. «Today, the Department of Justice has dealt a significant blow to the cryptocurrency crime ecosystem,» said the Monaco Attorney General. «Our actions send a clear message to fraudsters: whether you break our laws in China, Europe, or abuse our financial system on a tropical island, expect to face justice for your crimes in a United States courtroom.»

According to Chainalysis, since 2019, Bitzlato has facilitated the laundering of more than $ 1 billion in digital assets in the darknet. In total, Hydra accounted for 80% of the global darknet market revenue in 2021. The terrorist state’s black marketplace was used to trade drugs, fake documents, stolen databases, and other illegal goods. In the period from 2016 to 2022, more than $ 5.2 billion passed through Hydra accounts.