by Jessica S. Carey, John P. Carlin, Roberto J. Gonzalez, David Kessler, and Simona Xu.
From left to right: Jessica S. Carey, John P. Carlin, Roberto J. Gonzalez, David Kessler, and Simona Xu.
On January 18, 2023, federal authorities in Miami arrested Anatoly Legkdymov, founder and majority owner of Bitzlato Ltd, a peer-to-peer, global cryptocurrency exchange registered in Hong Kong. Bitzlato had processed approximately $4.58 billion worth of cryptocurrency transactions since May 3, 2018.[1] Legkdymov was charged by a complaint in the Eastern District of New York (“EDNY”) with knowingly conducting a money transmitting business that transmitted illicit funds for ransomware actors in Russia and failing to implement an effective anti-money-laundering (“AML”) program. On the same day, the U.S. Treasury Department’s Financial Crimes Enforcement Network (“FinCEN”) issued an order pursuant to Section 9714(a) of the Combating Russian Money Laundering Act[2] — the first one of its kind — identifying Bitzlato as a “primary money laundering concern” and prohibiting U.S. financial institutions from transacting with Bitzlato, effective on February 1, 2023 (the “Bitzlato Order”).[3] Concurrently, law enforcement authorities in Europe shut down Bitzlato’s digital platform, hosted on servers in France, seized $19.5 million of its cryptocurrency assets and arrested four more Bitzlato executives in Cyprus and Spain.[4]
