The National Cryptocurrency Enforcement Team Makes First Arrest
The National Cryptocurrency Enforcement Team, a newly established division within the US Department of Justice, made its first major move by apprehending Anatoly Legkodymov in Miami, Florida on January 18, 2022. Legkodymov, a Russian national believed to be living in Shenzhen, China, is accused of operating Bitzlato, an illegal crypto-exchange that conducted business on the dark web and was based in China with registration in Hong Kong.
International Cooperation Leads to Arrest
In a collaborative effort with French authorities, Europol, and law enforcement partners in Germany, Spain, Portugal, and Cyprus, the National Cryptocurrency Enforcement Team successfully seized Bitzlato’s servers and dismantled its digital infrastructure. Legkodymov faces charges of unlicensed money transmitting for his role in facilitating the transmission of illicit funds amounting to hundreds of millions of dollars, which were used to support darknet marketplaces and launder the proceeds of ransomware attacks.
Bitzlato’s Criminal Activities
According to Deputy Attorney General Lisa Monaco, Bitzlato was responsible for facilitating transactions totaling up to $700 million between 2018 and 2022 on Hydra, a dark web marketplace that was shut down in April 2022. Monaco described Bitzlato and Hydra as a sophisticated partnership in crypto crime. Additionally, Bitzlato allegedly received over $15 million in ransomware proceeds, playing a crucial role in laundering convertible virtual currency for ransomware actors linked to Russia, including the Conti ransomware-as-a-service group.
A Warning to Cryptocurrency Criminals
US Attorney for the Eastern District of New York, Breon Peace, issued a stern warning to individuals who believe they can evade the law by using cryptocurrency. The successful prosecution of Anatoly Legkodymov and the dismantling of Bitzlato’s operations demonstrate the determination of the National Cryptocurrency Enforcement Team to combat illegal activities in the crypto space.