• The U.S. Department of Justice (DOJ) announced the closure of the Bitzlato cryptocurrency exchange and the FBI’s arrest of its owner, Anatoly Legkodymov.
• The DOJ alleges that Bitzlato facilitated more than $700 million in transactions involving illicit funds from 2018-2022.
• Law enforcement and regulators have been increasing scrutiny in recent weeks, with Gemini and Genesis being charged by the SEC alongside FTX and other charges being levied against those involved.
U.S. Department of Justice Closes Cryptocurrency Exchange
The U.S. Department of Justice (DOJ) has announced the closure of the Bitzlato cryptocurrency exchange, along with the FBI’s arrest of its owner, Anatoly Legkodymov. Representatives from law enforcement revealed that the Hong Kong-based exchange was allegedly a part of a large illicit network designed to circumvent sanctions, launder money and conceal crimes.
Allegations
The DOJ alleges that Bitzlato facilitated more than $700 million in transactions involving illicit funds from 2018-2022, but at the time of their announcement, wallets tagged to Bitzlato only had $11,000 on them compared to a peak amount of $6 million earlier on in its operation.
Increased Scrutiny
This announcement comes at a time when law enforcement and regulators are increasing their scrutiny on cryptocurrencies around the world; Gemini and Genesis were both recently charged by the SEC alongside FTX and other charges were also levelled against those involved in related activities or entities such as Three Arrows Capital which many alleged were scams in their own right.
Warning From DOJ
In their live stream officials warned criminal actors regardless of where they reside must answer to US law enforcement: “Whether you break our laws from China or Europe or abuse our financial system from a tropical island—you can expect to answer for your crimes inside a United States courtroom” they said in reference to FTX’s hub in Bahamas potentially facing charges as well due to this increased scrutiny by US authorities.
Conclusion
It is clear that US authorities are taking an increasingly hard line stance regarding cryptocurrencies operating outside their jurisdiction – even smaller operations such as Bitzlato now face justice for alleged involvement with criminal activities such as money laundering or circumventing sanctions laws; this could mean we will see more cases similar to this one going forward if authorities continue down this current path – moreover it serves as yet another reminder for users to take extra caution when dealing with exchanges regardless or origin or size .