Bitzlato, cryptocurrency exchange is accused of working with ransomware organizations; founder arrested

The current owner of the crypto exchange Bitzlato, Anatoly Legkodymov, was detained by the authorities. They claim that the startup has been collaborating on the dark web with risky Russian ransomware outfits. According to reports, the CEO, who is currently residing in China, allegedly laundered over $700 million in money used for illegal activities. The 40-year-old Russian was detained on Wednesday, January 18, according to US prosecutors. Anatoly Legkodymov, the founder of Bitzlato, is expected to be charged with money laundering as a result of claims of improper financial spending. This Monday, the authorities opened a special inquiry to look at the cryptocurrency exchange's dubious aspects. In order to check the money laundering situations taking place behind the scenes, the US Justice Department reportedly asked the Financial Crimes Enforcement Network, or FinCEN, for assistance. [caption id="" align="aligncenter" width="976"] Image credit- BBC News[/caption] It was discovered that the accusations against Bitzlato were being made outside of the cryptocurrency industry. More crucially, the authorities claimed that the company had been collaborating with the hazardous DarkSide ransomware gang, which was responsible for the 2021 Colonial Pipeline breach. Phobos is a different ransomware organization linked to Bitzlato. The aforementioned group of hackers has already initiated cyberattacks against hospitals and medical facilities around the nation. In addition to the two ransomware organizations already described, it is found that Bitzlato communicated with the Conti ransomware gang, which allegedly declared its loyalty to Russia during the Russian invasion of Ukraine. According to the acting director of FinCEN, Himamauli Das, "Bitzlato plays a crucial role in enabling transactions for the Conti ransomware organization and other international ransomware players, including those that operate out of Russia." [caption id="" align="aligncenter" width="960"] Image credit- Reuters[/caption] The appalling truth about Bitzlato doesn't stop with its connection to the infamous Russian cyber terrorists. Actually, the cryptocurrency startup is also connected to negotiations with Hydra and Chatex, two cryptocurrency companies that were closed in 2022 as a result of smuggling goods on the dark web. FBI Special Agent Ryan Rogers claimed in an affidavit that Bitzlato served as a host for the unlawful activity. In the past, Hydra served as the "biggest counterparty" for illegal transactions. The document also claims that Legkodymov was aware of the plans from the beginning of processing the funds to the execution of illicit transactions. Strong proof that Legkodymov actually committed the crime for which he was arrested was also seized by the authorities. His communication to his colleague is supposedly contained in the chat conversation from 2019. "All traders are recognized to be fraudsters," it says. Additionally, a different claim asserts that Legkodymov has been receiving a lot of IP addresses from numerous individuals who are headquartered in the US. Bitzlato's transactions were partially blamed for the internet traffic. Legkodymov faces a five-year prison sentence if found guilty of the money-laundering offense. Cointelegraph claims that Bitzlato had a low profile up until a number of complaints surfaced in the cryptocurrency world.