DOJ Closes Cryptocurrency Exchange, Arrests Owner For Money Laundering

• The U.S. Department of Justice has announced the closure of the Bitzlato cryptocurrency exchange, along with 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.
• This announcement comes at a time when law enforcement and regulators are increasing their scrutiny on cryptocurrency exchanges such as Gemini and Genesis, FTX and their respective hubs.

Closure of Bitzlato Exchange

The U.S. Department of Justice (DOJ) has announced the closure of the Hong Kong-based Bitzlato cryptocurrency exchange, along with the FBI’s arrest of its owner Anatoly Legkodymov for allegedly running an illicit cryptocurrency network to evade sanctions, launder money, and conceal crimes.

Bitzlato Transactions

The DOJ alleges that Bitzlato facilitated more than $700 million in transactions involving illicit funds from 2018-2022; however, at the time of the live stream, tagged wallets associated with Bitzlato only had $11,000 on them compared to a peak balance of $6 million.

Increasing Scrutiny

This announcement regarding Bitzlato comes at a time when law enforcement and regulators are increasing their scrutiny on cryptocurrency exchanges such as Gemini and Genesis, FTX and their respective hubs. In a live stream hosted by representatives from law enforcement bureau, officials warned criminal actors that breaking U.S laws will result in having to answer for those crimes inside a United States courtroom regardless of residence or location.

Potential Frustration

The discrepancy in volume between this event ($6 million) versus other recent collapses (Three Arrows Capital), who many alleged to be scams in their own right ($100 million+), could potentially frustrate those desiring proper law enforcement in the industry.

Conclusion

To conclude, while authorities are continuing to take action against illegal activities related to cryptocurrencies across various jurisdictions , it remains unclear how effective this approach can ultimately be given how much money is involved in some cases compared to others .