DOJ Shuts Down Unremarkable Crypto Exchange with $11,000 of Deposits in Major Enforcement Win


In a stunning victory for a multilateral team of regulators and governments, the executive behind Bitzlato — an exchange shrouded in so much darkweb shadow that you’ve only just heard of it today — was arrested in Miami and his exchange painstakingly dismantled. The multi-million-dollar effort to shut down this notoriously unknown exchange was coordinated by the US Department of Justice, the US Department of Treasury’s Financial Crimes Enforcement Network (FinCEN), the French government, the Securities and Futures Commission of Hong Kong, the Ministry of Transportation and Communications of the Republic of Belarus, the Wuhan Institute of Virology, and Raytheon Technologies.

Various representatives from these organizations gathered in New York to disclose the operation and the charges, costing the aforementioned governments a total of $30,000 in travel and lodging costs alone. Bitzlato had processed hundreds of millions of dollars of illicit drug money from another darkweb market that you’ve never heard of, but while all of that money is still at HSBC, what’s important is that more drug money won’t be heading over there anytime soon. Until the next head of the proverbial Hydra pops up like the unstoppable weeds these markets and exchanges are.

The executive in charge of this world-spanning operation — with a little over ten grand to its darkly tinted balance sheet — was one Anatoly (no not that one) Legkodymov. He was arrested in Miami, charged with running a money transmitting business with illicit funds and failing to meet US regulatory safeguards. Anatoly — or Ani, as his friends called him — had humble beginnings in his native Russia. His parents were both textile workers for the Soviet State, a job that changed rapidly with the fall of communism. The shift brought country-wide prosperity but quite-local strife to his family, leading to estrangement from his sister and parents. He found camaraderie and companionship with a roving group of street urchins, eventually becoming a local leader in a Chinese Triad-aligned drug-dealing gang.

The drugs were a means to an end. And that end was Hua, the daughter of one of Shenzhen’s rival crime families; a chance encounter with her turned into an everlasting love, an enduring flame for his precious flower, a meaning to his otherwise marred existence. His unyielding, unconditional love for her could have moved mountains. But the bosses wanted him to move money instead.

So they kept a watch on her, to keep a watch on him — and to make sure he would keep the money flowing through Bitzlato. Ani knew he had no choice, but then again, his life had been filled with choices he didn’t have. He endured it, hoping that he would one day win her hand and his freedom from a life he wish he didn’t have to lead.

Ani cried when they arrested him. But not for himself…never for himself.

“We got him,” stated the DOJ’s special-guest-investigator Kyle Davies over video conference, a backdrop of softly swaying palm trees and crystal-clear ocean behind him. “Institutions that trade in cryptocurrency are not above the law and their owners are not beyond our reach. Su and I couldn’t have been more pleased to help the government recover this exchange’s ill-gotten $11,000; criminal enterprises have no place in the cryptocurrency industry.” Mr. Davies didn’t have time for follow-up questions, as he was already running late for an investor meeting.