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Anatoli Legkodimov, a 40-year-old Russian national, is suspected of laundering millions of euros in dirty money with his cryptocurrency exchange platform Bitzlato.

A Russian, creator of a cryptocurrency exchange platform suspected of laundering millions of euros in dirty money, was arrested Wednesday in the United States and five of his alleged accomplices were arrested in Europe.

Founder of the Bitzlato platform, Anatoli Legkodimov, a 40-year-old Russian living in China, was arrested in the middle of the night in Miami, Florida, as part of a large-scale raid announced jointly in Washington and Paris.

Handcuffed and with his feet shackled, he was brought before a federal judge later in the day who informed him of his indictment for “unauthorized money transmission activity,” a charge that carries up to five years in prison. Mentioning a “risk of flight”, prosecutors asked for his continued detention during this short hearing, which his wife attended, according to an AFP reporter.

A platform “used by crooks”

Five other men, mainly of Russian and Ukrainian nationality, were arrested in Spain, Portugal and Cyprus, in an operation led by French gendarmes.

Another suspect should be quickly arrested and a last one fled, according to a source close to the investigation, opened in September 2022 by the French justice.

All are suspected of having participated in the creation and development of the Russian-speaking platform Bitzlato, which allows “the rapid conversion of cryptoassets such as bitcoin, ethereum, litecoins, bitcoin cash, dashs, dogecoins and tether USD into rubles,” said the Paris prosecutor Laure Beccuau in a statement.

“This platform was used by mobsters to launder their money,” General Marc Boget, commander of the Gendarmerie in cyberspace, told AFP.

Bitzlato’s servers, located in France, were put out of business. The domain name and cryptoassets, estimated at nearly 16 million euros, were also seized, said the gendarmerie, which estimates the total transactions recorded on Blitzlato since 2018 at more than two billion dollars.

Close links with Hydra Market

This operation “deals a major blow to the cryptocurrency ecosystem” and “addresses the crisis of confidence in the cryptocurrency markets,” commented Deputy U.S. Attorney General Lisa Monaco at a press conference.

“Whether you break the law in China or Europe – or operate our financial system from an island in the tropics – you can expect to answer for your actions in a U.S. court,” she added, referring to the Bahamas arrest of former FTX cryptocurrency exchange boss Sam Bankman-Fried.

La justice américaine reproche à Anatoli Legkodimov d’avoir adopté une politique “d’identification minimale” pour ses clients, en se vantant de ne demander “ni selfie, ni passeport”. En conséquence, Bitzlato est devenu “un havre pour les fonds criminels”, estime-t-elle.

The company is accused of having carried out most of its transactions with “Hydra Market”, the main darknet sales platform until it was dismantled in April during a joint operation by German and American authorities.

Operating in the Russian language since 2015, Hydra Market sold everything from drugs to fake documents to malware on this dark side of the internet. According to the U.S. Department of Justice, Hydra users exchanged more than $700 million in cryptocurrency via Bitzlato.

According to the complaint, Anatoli Legkodimov knew that his clients were hiding under false identities in order to carry out illegal activities. In an internal message, he acknowledged that they were “crooks”. In conjunction with the prosecution, the U.S. Treasury placed Bitzlato on a list of institutions that pose a “money laundering risk.” “This makes Bitzlato a de facto international pariah,” commented Treasury Assistant Secretary Wally Adeyemo.

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