Europol says cryptocurrency exchange Bitzlato laundered $1 billion linked to criminal activities

Bitzlato, a small Russian crypto exchange that was indicted by the US Department of Justice last week for money laundering, has transferred about $1 billion in assets linked to criminal activities, according to the European Union’s law enforcement cooperation agency, or Europol.

On Monday, Europol said Hong Kong was registered Bitzlato received $2.3 billion in total. About 46% of the funds were linked to criminal entities sanctioned by the US Office of Foreign Assets Control (OFAC) and activities such as ransomware, online fraud, money laundering, and child abuse.

Europol said that users mostly converted bitcoin (BTC), ether (ETH), litecoin (LTC), bitcoin cash (BCH), dash (DASH), dogecoin (DOGE), and USDT into Russian rubles.

Bitzlato’s relationship with the Hydra Market

Bitzlato was particularly close to Hydra Market, a Russian dark web marketplace for drugs and the illegal acquisition of financial information. Europol said that about 1.5 million BTC was transferred between Bitzlato users and the Hydra marketplace, which closed in April 2022.

Europol said five people have been arrested so far, including Bitzlato CEO Anatoly Legkodimov who He was arrested by the US Department of Justice in Miami last Wednesday. The financial and marketing managers of the stock exchange were also arrested.

Furthermore, authorities searched eight homes, removed the exchange’s digital infrastructure, seized cryptocurrency wallets worth approximately $19.5 million, and froze more than 100 accounts involving more than $108 million.

The authorities investigating the case are from Cyprus, Belgium, France, the United States, Spain, the Netherlands and Portugal. Both the FBI and DOJ are involved in the case.

Shutting down Bitzlato and arresting alleged perpetrators is a good sign that regulators are serious about bringing justice to crypto criminals. However, the broader crypto community often criticizes regulators for not preventing crime but merely punishing it after the fact. Users should be careful when interacting with different crypto-central platforms.

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