The founder of Bitzlato cryptocurrency has been charged with committing financial crimes amounting to 700 million dollars.

"The authorities have taken control of cryptocurrency exchange Bitzlato and arrested its co-founder, alleging that the company has been contributing to a "high-tech network of crypto-related crimes."

The United States Department of Justice has accused Anatoly Legkodymov, a Russian national residing in China, of operating an enterprise that served what he formerly referred to as "criminals".

The Department alleges that Bitzlato processed over $700 million in illegal funds, contravening regulations meant to prevent money laundering.

Mr. Legkodymov was taken into custody in Miami.

At a press conference on Wednesday, US Attorney Breon Peace stated that institutions involved in cryptocurrency trading are not immune from the law and those responsible for such activities will be held accountable. He emphasized that the arrest of a defendant in this case serves as a reminder of the government's commitment to enforcing regulations and combating illegal activities within the cryptocurrency ecosystem.

Peace stated that the defendant, as alleged, operated a cryptocurrency exchange known as Bitzlato that actively marketed itself to criminals as a platform that would not ask questions. As a result of these efforts, the defendant allegedly received hundreds of millions of dollars in deposits. However, Peace emphasized that the defendant will now face the consequences for the negative impact that his company had on the cryptocurrency industry.

According to the complaint, the Hong Kong-registered exchange, Bitzlato, has processed an estimated value of $4.5 billion worth of cryptocurrency transactions since 2018. The firm's minimal identification requirements for its users have made it a favored destination for criminal proceeds and funds intended for illegal activities, as stated by the prosecutors.

The prosecution has stated that Bitzlato was well aware of the problematic issues, as evidenced by an internal document that acknowledges the exchange's handling of "dirty money" without proper customer-vetting procedures. This raises concerns about the company's compliance with anti-money laundering regulations and the risks posed to the financial system.

In addition, the authorities have indicated that Bitzlato had close connections to Hydra Market, a notorious darknet marketplace for illegal drugs, money laundering, and stolen financial information. The market was shut down last year by international law enforcement agencies as part of a crackdown on online criminal activities.

In conclusion, the allegations against Bitzlato highlight the importance of robust customer due diligence measures in the cryptocurrency sector and the need for regulatory oversight to prevent the abuse of digital assets for illicit purposes. The cryptocurrency industry must work closely with law enforcement agencies to identify and eliminate illicit activities, ensuring the integrity and stability of the financial system. Additionally, it is crucial for exchanges and other service providers to implement strong anti-money laundering policies and customer identity verification procedures to minimize the risk of abuse and maintain the credibility of the industry.

Bitzlato asserted that it did not entertain customers from the United States. However, prosecutors claimed that the company conducted substantial transactions with American clients.

In executing the operation, the United States authorities collaborated with law enforcement agencies in France and other nations.