In a raid, US FBI arrested an individual named ‘Anatoly Legkodymov’ who is the co-founder/majority shareholder of the notorious crypto exchange, ‘Bitzlato’.
According to the US Department of Justice (DOJ), Legkodymov was arrested in Miami on the eve of 17th January 2023.
Legkodymov, who is Russian born/speaking was permanently residing in China and was visiting Miami USA.
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He was accused of registering a crypto exchange in Hong Kong from where the firm transacted millions of dollar worth of funds.
Later, an official press conference was held by Lisa O. Monaco, the 39th Deputy Attorney General of the USA, confirming the arrest of Legkodymov.
She told the media that Bitzlato was wanted in several states for committing crimes of crypto misuse, corruption, and money laundering.
She also told that Bitzlato was a China-registered platform that was also associated with several markets on the ‘darknet’. According to DAG, Bitzlato was also responsible for ransomware attacks in various parts of the world.
DAG suggested that a joint investigation was going on against Bitzlato in US and France and the location of Legkodymov was busted jointly.
She was also seen quoting that “the moment has come when a significant blow has been caused upon crypto criminals’.
Bitzlato A Safe-House for “International Crooks”.
The co-founder of Bitzlato was accused of running an exchange that was purposefully established for facilitating illegal and criminal activities.
This was also admitted by Legkodymov during questioning when he told authorities that his company was facilitating “international crooks”.
According to Monaco, Bitzlato was deeply connected with the notorious Hydra market and was a crucial finance source attached to the market.
She pointed out that Hydra was the biggest criminal market on the Darknet which is primarily operated from Russia.
However, said Hydra market was busted last year in April by German law enforcement agencies on the information supplied by US counterparts.
More Than $700 Million Laundered
DOJ further accused Bitzlato of laundering $700 Million at the behest of financial criminals, drug lords, corrupt, crypto stealers, and hackers.
This hefty sum of money was whitened by Bitzlato in the period beginning from 2018 to 2022.
DAG also apprised that the busting operation was carried out with the joint efforts of multiple states, mainly from Europe.
DOJ told that before busting Bitzlato, several search and seizure raids took place in many European countries. These raids were aimed at closing down Bitzlato-linked premises and seizing of servers of Bitzlato.
As per the information provided by DOJ, Bitzlato’s servers were subsequently located in many European countries.
Bitzlato Claims Getting Hacked
After the successful busting operation, Bitzlato claimed that its website was hacked.
In this connection, Bitzlato even put a notice on its Telegram account that the website was compromised.
Bitzlato’s users were also notified that withdrawals had been suspended temporarily to avoid possible harm. Users were further told not to engage in any transactions until further notice.
The message for users suggested that services were hacked and some funds have been taken out from the network unauthorizedly.
However, the exact amount of stolen/missing funds was not disclosed by Bitzlato.
Later, another message was posted for users which said that in case of any loss, each penny will be refunded by Bitzlato.
It looked as if somebody did manage to hack into Bitzlato and take control of the website and may perhaps steal funds.
The website of Bitzlato however was displaying a message that it was taken over by ‘French authorities’ in an enforcement action.
A Concocted and Fabricated Story?
Considering the circumstances, it cannot be assumed totally that Bitzlato had been hacked. Neither it can be said with surety that it is a cover-up story concocted and fabricated by Bitzlato itself.
However, Bitzlato’s claim is that it has been hacked subsequently soon after making the announcement of the scheduled maintenance break.
The story of Bitzlato is yet to be revealed whether it is false or true but none of the authorities have spoken anything about the hack.