Anatoly Legkodymov, the Russian co-founder of Hong Kong-registered virtual currency exchange Bitzlato, pleaded guilty to money laundering offenses in a New York court on Wednesday, the U.S. Attorney’s Office for the Eastern District of New York said.
Legkodimov was scheduled to appear in a Brooklyn courtroom before U.S. District Judge Eric Vitaliano at 2:30 p.m. ET, Reuters reported this morning.
“Legkodimov’s guilty plea today confirms that he was well aware that his cryptocurrency exchange, Bitzlato, was being used as a public revolving door by criminals seeking to take advantage of his lax control over illicit financial transactions,” said U.S. Attorney Breon Peace. “I will do it,” he said. “The defendant may have thought he was operating from a safe haven overseas for the ‘Don’t Ask’ clearinghouse, but this indictment and conviction show otherwise.”
Legkodimov was arrested in Miami in January on charges of transferring illegal funds. According to the indictment, Bitzlato was the largest counterparty to the now-defunct Hydra darknet marketplace, whose users sent approximately $700 million worth of cryptocurrency through the exchange.
The indictment alleges that Bitzlato received more than $15 million in ransomware proceeds and that Legkodymov and his team knew the exchange was being used by criminals.
Money laundering concerns
Along with Legkodymov, former Bitzlato CEO Mikhail Lunev, marketing director Alexander Goncharenko, contractor Pavel Lerner and an unnamed development and operations engineer were arrested in several European countries, according to a co-founder who was in Moscow touting the plan. Restart the platform.
Bitzlato was listed as a “major money laundering concern” by the Treasury’s Financial Crimes Enforcement Network earlier this year. French authorities seized Bitzlato infrastructure in January.
(Updates statement from the U.S. Attorney’s Office.)
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