Bitzlato Founder Admits Guilt, Agrees to Shut Down Dark Web Exchange

In a recent development, Anatoly Legkodymov, the founder of the Hong Kong-based crypto exchange Bitzlato, has pleaded guilty to operating an unlicensed money transmitting business. The US Department of Justice (DOJ) had initially filed charges against Legkodymov in January, accusing Bitzlato of catering to criminals and accumulating hundreds of millions in deposits.

Guilty Plea and Dissolution:

Legkodymov, facing charges in a New York court, has agreed to dissolve Bitzlato as part of his plea deal. The DOJ revealed that he will also relinquish any claim to approximately $23 million in seized assets of Bitzlato. However, a sentencing date has not been set yet.

DOJ's Efforts Against Cryptocrime:

US Attorney Breon Peace emphasized Bitzlato's role as a "no-questions-asked cryptocurrency exchange" that attracted criminals. The DOJ, in collaboration with German authorities, had previously taken down Hydra Market in 2022, a platform dealing with drugs and stolen financial information. Bitzlato was reported to have exchanged around $700 million worth of crypto with Hydra Market.

Deputy Attorney General Lisa Monaco stated, "We are dismantling and disrupting the cryptocrime ecosystem using all tools available — including criminal prosecution." The conviction of Bitzlato's founder marks a significant step in these efforts.

Bail Denial and Crypto Access:

Legkodymov, a Russian national in the US on a visa, was denied bail in March. The court cited his access to crypto and Russian nationality as reasons to keep him detained.

Crypto Community's Surprise:

The initial DOJ announcement in January surprised some in the crypto community. Reports on platforms like X indicated that some users had never heard of Bitzlato before.

As the founder admits guilt and agrees to shut down Bitzlato, the DOJ continues its crackdown on cryptocrime. The case highlights the authorities' determination to tackle unlicensed and illicit activities in the cryptocurrency space.