The CEO, sales and marketing director of the Bitzlato cryptocurrency exchange was detained on February 2, by Spanish law enforcement officers. Six Russian and Ukrainian citizens, who coordinated the exchange of cryptocurrencies, were detained.
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The anonymity of the exchange enabled it to serve as a platform for criminal organizations that smuggle money using cryptocurrencies. Authorities confiscated 18 million euros ($19.8 million) in digital assets, fiat money, and property (cars, smartphones, etc.) and blocked more than 100 exchange accounts.
Anton Shkurenko, the co-founder of Bitzlato, said that half of the bitcoins stored in the crypto exchange's wallets might be withdrawn as soon as the exchange restarted. Previously, investigators found 35% of user funds stored in Bitzlato. Shkurenko said that the new crypto exchange would be "out of reach of law enforcement agencies."
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Anatoly Legkodymov, the main shareholder and co-founder of Bitzlato, was imprisoned in Miami on January 18, according to the US Department of Justice. The crypto exchange violated Know Your Customer and anti-money laundering laws on the same day. Some of the exchange funds were also confiscated.
According to prosecutions, the exchange traded more than $700 million in cryptocurrencies with Hydra Market, an "illegal online marketplace for drugs, stolen financial information, false documents, and money laundering services," which was shut down in April 2022 by US and German authorities.