Pierluigi Paganini
December 08, 2023
Anatoly Legkodymov (41) (aka Anatolii Legkodymov, Gandalf, and Tolik), the Russian founder of the unlicensed Bitzlato cryptocurrency exchange, has pleaded guilty in a money-laundering scheme.
The police arrested Legkodymov in Miami in January, he was in a U.S. federal court with conducting a money-transmitting business that transported and transmitted illicit funds and that failed to meet U.S. regulatory safeguards, including anti-money laundering requirements.
The Bitzlato cryptocurrency was used cybercriminals for illicit transactions, including transactions associated with ransom payments.
Bitzlato’s largest counterparty in cryptocurrency transactions was Hydra Market, a dark web marketplace that was considered the largest and longest-running darknet market in the world. The U.S. and German law enforcement seized Hydra Market in April 2022. According to DoJ, Hydra Market users exchanged more than $700 million worth of cryptocurrency with Bitzlato.
“The founder and majority owner of Bitzlato Ltd. (Bitzlato), a cryptocurrency exchange that served as a primary conduit for dark market purchasers and sellers, as well as a safe haven for illicit transactions by ransomware criminals, pleaded guilty today to operating a money transmitting business that transmitted illicit funds.” states the published by DoJ. “In connection with his plea agreement, Anatoly Legkodymov, aka Anatolii Legkodymov, Gandalf, and Tolik, 41, who is a Russian national and resided in Shenzen, People’s Republic of China, agreed to dissolve Bitzlato and to release any claim over approximately $23 million in seized assets of Bitzlato.”
Bitzlato’s lax KYC procedures reportedly attracted criminal proceeds and funds earmarked for illicit activities.
“As alleged, Bitzlato advertised a safe haven for fraudsters, thieves, and other criminals to launder illicit proceeds — but their business model didn’t account for federal law enforcement,” said Deputy Attorney General Lisa O. Monaco. “We are dismantling and disrupting the cryptocrime ecosystem using all tools available — including criminal prosecution. In January, the Department and our partners took down Bitzlato’s infrastructure and seized its cryptocurrency. Today’s conviction of Bitzlato’s founder is the latest product of our efforts.”
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