Bitzlato seized, alleges $700 mln of illicit funds processed

NotATether

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Quote from: stompix on January 19, 2023, 11:33:22 AM

First reaction, what the * is Bitzlato?
Can't find any volume stats on them, neither Coingecko or CMC are of any help here.

~~I heard that Bitzlato was sancitoned a while ago for helping Russia evade sanctions, several months ago, so this is not too surprising.~~

Quote from: stompix on January 19, 2023, 11:33:22 AM

Second

Quote

Anatoly Legkodymov, a Russian national living in China, was arrested in Miami on Tuesday on charges that he operated the exchange as an unlicensed money exchange business that "in his own words, catered to 'known crooks,'" a top Justice Department official said.

What the hell was he doing in Florida? Seriously, how can make such risky trips when you know what you're doing behind the counter, and being a Russian right now in the US involved in laundering money? Even if I were a perfectly clean owner of a Russian exchange I would not set foot in the US now!

Somebody got too carried away with the Miami nightlife and overstayed their trip Roll Eyes

edit: somehow I missed the necrobump on this post, and I was thinking they were seized today.

sarah Evans

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I hope this gets to every investor in the Bitzlato exchange. bitzlato.us.com has enabled withdrawals for all members of bitzlato.com via their telegram group @bitzlatoexchange This has been my dream, and it came to reality as a testimony.

Bitcoin_Arena

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฿itcoin for all, All for ฿itcoin.

If legkodymov was arrested as per the articles, then who the hell just woke up the legkodymov profile and posted the latest update? Grin

More drama unfolding.

legkodymov

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Service charged 0.5%, not a 5% fee.

Also, it did not provide services in IIRC. Just telegram, web and mobile application.

I will give other details, response later.

legkodymov.

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Quote from: stompix on January 19, 2023, 11:33:22 AM

First reaction, what the * is Bitzlato?
Can't find any volume stats on them, neither Coingecko or CMC are of any help here.

Agreed. There is nothing concerning about the takedown of this exchange. However, as I mentioned in another thread, what should be concerning is much of the transactions of Bitzlato has been with the darknet marketplace Hydra, there are also transactions with a Russian ponzi scheme and with Binance which might imply that the exchange is being used as a part of a moneylaundering scheme. News of a crackdown on Binance would certainly cause another big dump.

Approximately two-thirds of Bitzlato’s top receiving and sending counterparties are associated with darknet markets or scams. For example, Bitzlato’s top three receiving counterparties, by total amount of BTC received between May 2018 and September 2022 were: (1) Binance, a VASP; (2) the Russia-connected darknet market Hydra; and (3) the alleged Russia-based Ponzi scheme “TheFiniko.”

Source https://www.fincen.gov/sites/default/files/shared/Order_Bitzlato_FINAL%20508.pdf

stompix

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Quote from: LeGaulois on January 19, 2023, 07:05:17 PM

I found the owner has an account on bitcointalk
https://bitcointalksearch.org/user/legkodymov-4704

Oh ****
I didn't pay attention to the name as when I see an -ov ending name I'm sure I will forget it the next second, but when you mentioned in that quote engineers and mining, this legkodymov, oh yeah! The guy has one hell of a history book with bitcoin!

Quote from: BITMAIN on February 12, 2015, 03:46:41 AM

Thanks to legkodymov.
S5 was based on legkodymov's serial power design, and its power consumption at wall is 0.51W/G.
S2-replace PCB will be released after Chinese Spring Festival, and it will be serial powered too, and its power consumpiton at wall will be less than 0.4W/G.

This now brings the question, (one that probably nobody can answer) why would this guy who could have literally swum in coins like Scrooge McDuck would be laundering money? Was a really a case of defiance against the state and or just unlimited greed hidden behind claims of freedom?

Z-tight

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Bitzlato isn't a very popular crypto exchange, but it looks like they were comfortable with being unpopular so they can do all sorts of illegal deals with scammers from the hydra market and other places, the news says the owner knew about it all, that means the exchange was so comfortable helping scammers move their funds, while they make their own percentage from it.

Quote

Bitzlato has marketed itself as requiring minimal identification from its users, specifying that “neither selfies nor passports [are] required.” On occasions when Bitzlato did direct users to submit identifying information, it repeatedly allowed them to provide information belonging to “straw man” registrants.

A centralized exchange with deficient KYC system is surely a scam exchange, KYC isn't something that true bitcoiners like, that's why crypto people are advised to use decentralized exchanges if they don't want to do KYC, but if you use a centralized exchange you have to pass a strong KYC process, and if they allow you easily cheat the process, that should tell you they are a scam exchange.

This was Bitzlato's shady dealings, every centralized exchange has their own skeleton to hide that may one day bring problems for them. Think of people who can leave their funds in an exchange like Bitzlato, even if they were not caught by the authorities, they would have still caused people to lose their money through another event. This is just another event to repeat the warning that people should not leave their funds on an exchange, and they should find out deep things about the exchanges they use.

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Quote from: stompix on January 19, 2023, 11:33:22 AM

It was a not well know russian exchange, but not unknow to everyone, hence hydra market users, etc.
Its old name was Changebot IIRC. He started with a bot on telegram
He moved from China to Florida and lived there (the article doesn't say it I believe)
Tongue

Surely to live "the crypto life" with lambo and big house. Propably more funy to live it in Florida than China.

I found the owner has an account on bitcointalk
https://bitcointalksearch.org/user/legkodymov-4704

and

Quote

luke bitcoin core dev.

appears anatoly was an bitcoin og.

they were business partners since OG times...

https://twitter.com/napgener/status/1615768685511323649?ref_src=twsrc%5Etfw

edit: to add history

Quote

First started as a Russian cryptocurrency mining company, Bitzlato started its activities in 2013, when it was founded by a team of experienced engineers. Since then, the company runs and develops mining equipment, data centers, and even provides client mining services in several countries.

In 2016, Bitzlato branched further into online crypto services by launching an affordable, safe, and secure Bitcoin P2P exchange service on a popular messaging service Telegram - a mobile BTC banker @BTC_CHANGE_BOT.

As the usage of the service grew, the Bitzlato team launched more Telegram exchange bots, including the ones for buying and selling Ethereum (ETH), Litecoin (LTC), Dash (DASH), Bitcoin Cash (BCH), and Dogecoin (DOGE). As a result, it became the second-best P2P exchange in Russia in terms of the trading volume.

In 2018, Bitzlato launched yet another new service - a web version of already existing P2P exchangers along with a cryptocurrency exchange. Besides, the exchange went through a rebranding and changed its name from ChangeBot into Bitzlato. Since then, all of the exchange’s services are interconnected, meaning that you can make use of all of them via a single user account.

https://cryptonews.com/reviews/bitzlato/

dkbit98

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Quote from: LeGaulois on January 19, 2023, 11:04:43 AM

Bitzlato has been hacked!

They are starting to target p2p trading websites, and funny thing is that CZ and Binance are the main snitches who helped identify and locate Bizlato owner and seize funds from them.
Binance is now officially working as government agents and I wouldn't trust them with anything, especially if you are holding coins there or you have their cards... consider everything is directly reported to all governments.
I never used Bizlato because they kept low profile and I see all their domains have been seized by authorities, but for people who are interested how Bitzlato looked before, you can check out their archived pages:
https://web.archive.org/web/20230106055055/https://bitzlato.com/

stompix

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First reaction, what the * is Bitzlato?
Can't find any volume stats on them, neither Coingecko or CMC are of any help here.

Second

Quote

Anatoly Legkodymov, a Russian national living in China, was arrested in Miami on Tuesday on charges that he operated the exchange as an unlicensed money exchange business that "in his own words, catered to 'known crooks,'" a top Justice Department official said.

What the hell was he doing in Florida? Seriously, how can make such risky trips when you know what you're doing behind the counter, and being a Russian right now in the US involved in laundering money? Even if I were a perfectly clean owner of a Russian exchange I would not set foot in the US now!

LeGaulois

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Bitzlato has been hacked!

At least, that's what they thought was happening when they noticed intrusions on their infrastructures, Bitzlato's admins were posting: "We are being hacked, they are taking money from us"

This times, the hackers are in reality the police. Cheesy

France; Spain, The Netherlands, Portugal, America, Interpol... All together

This p2p custodial crypto exchange was used as a money laundering scheme, crypto tumbler, illicits funds etc, for 5% in fees.
Most of the funds were coming from Hydra Market by the way ($700 mln), and more than 4 billion euros would have passed through it since 2018.
The owner knew it and said it himself "they are all crooks" and he was glad to not apply any KYC.

Glad, until arrested in The US...

https://www.justice.gov/usao-edny/pr/founder-and-majority-owner-bitzlato-cryptocurrency-exchange-charged-unlicensed-money
https://www.reuters.com/business/finance/us-treasury-dept-says-has-identified-bitzlato-ltd-money-laundering-concern-2023-01-18/

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