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CNN
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US authorities stopped a Russian cryptocurrency executive who allegedly oversaw the exchange of hundreds of millions of dollars with drug dealers and cybercriminals.
Anatoly Legkodymov, 40, was arrested in Miami, the Justice Department said Wednesday.
The US Treasury Department has labeled its cryptocurrency exchange, Bitzlato Limited, as a "primary money laundering concern," a move designed to cripple the exchange and cut off its funding.
His arrest marks the latest effort by President Joe Biden's administration to crack down on digital currencies that US officials say have long been a safe haven for fraudsters and drug dealers. The illicit activity has caused a "crisis of confidence" in cryptocurrency markets, Assistant Attorney General Lisa Monaco told reporters Wednesday as she vowed to continue to hold the industry accountable.
Bitzlato allegedly traded more than $700 million worth of cryptocurrency with Hydra, a notorious dark web marketplace for selling drugs and hacking tools that was shut down by US and German authorities in April.
French and European authorities seized Bitzlato's cryptocurrency and its computer servers, justice officials said.
Legkodymov will be arraigned Wednesday in the US District Court for the Southern District of Florida, according to the Justice Department. Legkodymov could not be reached for comment.
Legkodymov lived in China, which does not have an extradition treaty with the United States. It was not immediately clear why he traveled to Miami.
Bitzlato's website was down on Wednesday. A Twitter account by the name of the exchange did not immediately respond to a message seeking comment on the charges.
Monaco has overseen an aggressive effort at the Justice Department to seize some of the billions of dollars in illicit cryptocurrency proceeds that scammers, hackers and drug dealers have reportedly obtained in recent years. To try to fix the problem, the FBI last year formed a team of cryptocurrency experts that focuses on blockchain analysis and the seizure of digital money.
In June 2021, law enforcement officials seized approximately half of the estimated $4.4 million ransom payment that Colonial Pipeline, which provides approximately 45% of the fuel consumed on the East Coast, paid to Russian-speaking hackers. . That ransomware attack shut down the pipeline for days and caused long lines at gas stations in several states.
But the cybercriminal economy is still booming.
Cybercriminals received more than $1.2 billion in ransom payments in 2020 and 2021 combined, according to cryptocurrency tracking firm Chainalysis.
The Bitzlato outage is part of a "very strategic" effort by US authorities to "go after illicit weak spots in the crypto economy," said Ari Redbord, head of legal and government affairs at TRM Labs, a firm that investigates financial crimes. .
โThese types of regulatory actions send a message to the entire [cryptocurrency] industry: We are still going after non-compliant exchanges, no matter where they are or how big they are," Redbord, a former senior Treasury and Justice official, told CNN.
