Anatoly Legkodymov of Bitzlato Ltd. is charged with conducting an unlicensed money-transmitting business and faces up to five years in prison if convicted.
In recent months, Justice Department investigators also sent subpoenas to American investors as part of a long-running investigation into potential violations of money-laundering rules at Binance, the world’s largest crypto exchange,Scott Garland, a former cybercrime prosecutor, said the action against Bitzlato shows the United States is using all of its available tools to hold crypto companies accountable.
One question surrounding the U.S. investigation of Binance is whether the company is subject to American laws. Since 2019, Binance has said it bars Americans from accessing its main offshore exchange where derivatives can be bought and sold; however, some Americans claim they can bypass these restrictions. Binance was founded in China, but since 2020, the company has claimed it has no singular headquarters.
Prosecutors emphasized on Wednesday that Bitzlato was subject to U.S. money-laundering rules even though it was based in China and run by a Russian national. Although the company claimed it did not allow U.S. users, prosecutors allege the company did “substantial” business with U.S.-based customers.
The Justice and Treasury Departments have previously gone after larger exchanges they said marketed themselves to criminals looking to avoid identification. In the best-known criminal case, prosecutors , a major exchange in Eastern Europe favored by ransomware gangs, with money-laundering. Originally arrested on a Greek beach holiday, Alexander Vinnik was extradited to the United States last year.
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Justice Dept. charges Russian founder of cryptocurrency firmA Russian national who founded a cryptocurrency exchange that the Justice Department says became a haven for the proceeds of criminal activity has been arrested, federal officials said Wednesday. Anatoly Legkodymov, who lives in China, was arrested Tuesday night in Miami and was due in court on a charge of conducting an unlicensed money-transmitting business. Prosecutors allege that Legkodymov's cryptocurrency exchange, Bitzlato Ltd., of which he served as majority owner, did not implement required anti-money-laundering safeguards and required only minimal identification from its users, even permitting them to supply information belonging to “straw man registrants,” people serving as cover for the users.
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