The Department of Justice announced Wednesday its most significant effort to date to target and arrest cyber criminals exploiting Americans and the cryptocurrency market. Working in partnership with the Treasury Department and French law enforcement, the DOJ disrupted Bitzlato, a China-based cryptocurrency exchange described as notorious for laundering criminal proceeds from the darknet, the DOJ explained at a live afternoon press conference.
FBI agents arrested Bitzlato founder, senior executive, and majority shareholder Anatoly Legkodymov, a Russian national reportedly residing in China. He was taken into custody Tuesday night in Miami and charged with conducting an unlicensed money transmitting business.
The DOJ indicated Bitzlato accounted for some $700 million in transactions. Those transactions were allegedly funded by illegal activity conducted through the darknet that rely on currencies that allow easy access with minimal identity verification and restrictions. The funds are then easily laundered.
Bitzlato failed to implement safeguards required by U.S. law, Deputy Attorney General Lisa Monaco told reporters. Those safeguards enable law enforcement agencies to detect and investigate financial crimes.
“Instead, Bitzlato facilitated the transmission of hundreds of millions of dollars in illicit funds, fueling darknet market places and laundering the proceeds of ransomware attacks,” Monaco asserted. She further explained her office will not only target hackers and fraudsters that profit from cryptocurrencies, but that she is unleashing the full force of the Department of Justice on the illicit actors and entities that court cyber criminals.
If conspiracy land is the big city, then Crypto is a strange warehouse at the edge of the industrial district. You see ubiqitous legitimate looking vehicles coming and going from it, but also limos with tinted windows and seedy looking vans - all in the same day. Thanks for keeping us updated, Jack.