Twitter users were very concerned after the US Department of Justice (DOJ) released a statement on Wednesday that it would announce a “major international cryptocurrency action” within a few hours.
Prices began to fall and wild speculation began. Some believe it will be related to Binance or some other major players in the industry. Binance CEO Changpeng Zhao even tweeted “4” an hour before the announcement, referring to his decision for the fourth New Year not to pay attention to FUD.
As it turned out, the “main action” of the Ministry of Justice was related to a little-known small Russian exchange called Bitzlato. The Ministry of Justice seized the stock exchange and arrested its co-founder Anatoly Legkodimov. The Hong Kong-registered exchange has been charged by the Department of Justice with handling more than $700 million in illicit funds. Legkodimov was accused of money laundering.
The Justice Department said Bitzlato was closely linked to a darknet market called Hydra Market, which is known to sell drugs, money laundering, and stolen financial information. It was closed by the authorities last year.
Crypto Twitter mocks Justice Department announcement
When the Justice Department announced the charges against Pizzellato, many were confused. Cryptojournalist Frank Chaparro of six years ago said on Twitter that he had never heard of the exchange and asked if he could “sue the Department of Justice for wasting an hour of my life.”
Hsaka, a well-known crypto trader, published a memo suggesting that the Department of Justice did not protect investors from bankrupt FTX, Celsius, and other crypto firms, but instead charged an unknown exchange.
Ryan Selkis, founder of cryptocurrency research firm Messari, said the Justice Department is wasting taxpayer money by focusing on bad actors.
“If Bitzlato doesn’t take us to $12k, I really don’t know what could have happened,” said DonAlt, another crypto trader.
Wes Mantooth poked fun at Bitzlato’s origins.
While the Department of Justice and other US regulators have been active in pressing charges against crypto criminals, the broader crypto community is waiting for them to investigate and bring justice to the larger players in the industry. For investors, it’s important to remember that in most cases, regulators come after the crime has already occurred, at least in the area of finance.