After a hellish 2022, in the first few weeks of 2023, the biggest predictions for cryptocurrencies were about to begin? That’s what many thought after word quickly spread about the press conference to announce.
Many thought that the announcement was very likely about Binance, the world’s largest cryptocurrency exchange. The news from DOJ was actually about cryptocurrency exchanges. And what is the name of that exchange? Bitzrat!
No, not Binance, but they both start with ‘B’. Close enough, right? it’s not.
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Crypto analytics firm Arkham says it holds Bitrate-related crypto wallets enough Over $6 million at its peak. So what’s the deal with Bitzlato? How did this tiny cryptocurrency exchange end up on the U.S. radar?
Department of Justice announced The company was indicted for money laundering for unauthorized transfers. According to a DOJ press release, Bitzlato “has been in the money transfer business of transporting and transmitting illicit funds and has not met U.S. regulatory safeguards, including anti-money laundering requirements.”
Prosecutors also announced that Russian national Anatoly Legkodimov, founder of a Hong Kong-based cryptocurrency exchange, was arrested in Miami on Tuesday night. You could face up to five years in prison for doing business.
And perhaps what caught the attention of U.S. officials was the relationship between the cryptocurrency exchange and dark web marketplace Hydro Market. Over $700 million worth of cryptocurrency was exchanged for Bitzlato by users of illegal marketplaces for things like drugs and stolen credit cards. The exchange also received “more than $15 million in ransomware proceeds,” according to the DOJ.
Still, it was odd that the DOJ made such a big deal about a fairly insignificant player in the cryptocurrency industry.
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On social media, cryptocurrency users prepared for the worst before the news broke. In the FTX post-collapse world, major players look vulnerable. Actually last month Reuters report DOJ shared that it had been investigating Binance for potential money laundering and criminal sanctions violations for the past four years.
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Instead, the big US Department of Justice news was about Bitzlato, something many in the industry hadn’t even heard of until today.
