Europol has steepened its grasp on troubled exchange Bitzlato with the seizure of substantial crypto assets.
The European Union Agency for Law Enforcement Cooperation (Europol) recently took another significant step in enforcement actions against Bitzlato. According to Europol, a recent sting operation across Europe and the US resulted in the seizure of more than $19 million in digital currencies. The European Union law enforcement agency also said the joint operation led to the arrest of 5 individuals linked to Bitzlato. Among these individuals is the embattled crypto exchange’s founder Anatoly Legkodymov who was arrested in Miami last week.
Europol also revealed that authorities froze more than 100 accounts at other crypto exchanges that controlled 50 million euros. Furthermore, US authorities reportedly tried to seize Bitzlato’s servers for allegedly aiding and abetting Russian illicit finance.
In addition to taking control of crypto wallets containing $19.5 million, Europol also provided insight into questionable Bitzlato operations. The government agency alleged that approximately 46% of assets ($1.09 billion) moved through the exchange were linked to illicit activities. According to a Europol analysis, Bitzlato received over 2.1 billion euros in crypto, such as Bitcoin (BTC), Dash (DASH), and Dogecoin (DOGE). Europol further stated that the beleaguered crypto company converted much of these questionable funds into Russian rubles.
Commenting on the Bitzlato crypto assets development, Europol said:
“While the conversions of crypto-assets into fiat currencies is not illegal, investigations into the cybercriminal operators indicated that large volumes of criminal assets were going through the platform. The majority of suspicious transactions are linked to entities sanctioned by the Office of Foreign Assets Control (OFAC), with others linked to cyber scams, money laundering, ransomware, and child abuse material.”
Latest Europol Development Follows Bitzlato Founder US Arrest Last Week
The FBI arrested Legkodymov on Tuesday night in Miami for allegedly laundering around $700 million. The Bitzlato founder’s apprehension formed part of broader plans by the Department of Justice to topple a high-profile money laundering syndicate.
At the time of Legkodymov’s arrest, Deputy Attorney General Lisa Monaco said:
“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.”
In addition, Monaco suggested the long arm of US government laws regarding financial compliance. According to her, regardless of where lawbreakers may be based, they would still be answerable for their crimes in the US.
Monaco also stated that Legkodymov’s arrest would stop Bitzlato from servicing criminals linked to Russia. The crypto exchange effectively shut down following its founder’s capture in the US.
The DOJ stated that Legkodymov ran a money-transmitting business that violated anti-money laundering requirements. Furthermore, the federal law enforcement department alleges that the Russian crypto boss moved illicit Russian-linked funds.
Following his capture, Legkodymov appeared in US District Court for the Southern District of Florida on January 18th. However, it is unclear what charges his Bitzlato associates might face in Europe.
Before his arrest, Legkodymov lived in China.