US Deputy Attorney General Lisa Monaco says the arrest is a "significant blow" to the cryptocrime ecosystem.
US authorities have arrested the owner of the China-based cryptocurrency exchange, Bitzlato, for alleged money laundering, hailing the move as a global "blow to the cryptocrime ecosystem."
Anatoly Legkodymov, 40, a Russian living in Shenzhen, China, was held in Miami overnight on Tuesday and was due to appear in court in the city during the day, the Department of Justice said at a press conference on Wednesday.
He was detained for his role in allegedly transmitting a total of $700 million in illicit funds, the department said, pointing to criminals using the exchange as a haven for narcotics trading and selling stolen financial information.
According to court documents, Legkodymov is the majority shareholder of Hong Kong-registered Bitzlato, which has marketed itself as requiring minimal identification from users.
"Today the Department of Justice dealt a significant blow to the cryptocrime ecosystem," US Deputy Attorney General Lisa Monaco told reporters in Washington.
"Overnight, the Department worked with key partners here and abroad to disrupt Bitzlato, the China-based money laundering engine that fueled a high-tech axis of cryptocrime, and to arrest its founder, Russian national Anatoly Legkodymov."
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Monaco said that "today's actions send the clear message: whether you break our laws from China or Europe - or abuse our financial system from a tropical island - you can expect to answer for your crimes inside a United States courtroom."
Bitzlato and the 'darknet'
Bitzlato's largest partner for transactions was Hydra, an anonymous, illicit online marketplace on the "darknet" that was shut down by US and German authorities last year.
Hydra sold illegal drugs, stolen credit card data, counterfeit currency and fake identity documents, masking the identities of those involved using encryption.
When it was closed in April 2022, the Hydra marketplace had around 17 million customer accounts and more than 19,000 vendor accounts, according to German federal police.
The secret "darknet" includes websites that can be accessed only with specific software or authorisations, ensuring anonymity for users.
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