Bitzlato Founder Held Without Bail as More Sanctions Evasion Comes To Light

Legkodymov’s “access to cryptocurrency” and status as a Russian national who was in the US on a visa are reasons he should be detained, a judge said

article-image

Anton27/Shutterstock.com modified by Blockworks

share

Bitzlato founder Anatoly Legkodymov made his first appearance on Tuesday in New York, where the Russian national accused of processing more than $700 million in illicit funds was denied bail. 

United States Magistrate Judge Vera M. Scanlon cited Legkodymov’s “access to cryptocurrency” and status as a Russian national who was in the US on a visa as reasons for keeping him detained. 

Under no conditions of release could Legkodymov be trusted to remain in the US and in good standing, Scanlon said in the order of detention filed Tuesday. 

The hearing was Legkodymov’s first since the US announced charges for allegedly facilitating the laundering of illicit funds in January

Legkodymov, the founder and majority owner of Hong Kong-based exchange Bitzlato, also helped process “millions in ransomware proceeds,” the Department of Justice said

The bail hearing comes as more reports of cryptocurrency being used to evade Russian sanctions surface. 

The Russian branch of Transparency International, an international anti-corruption nongovernmental organization, said at least eight different exchanges are currently operating in Russia without know your customer (KYC) policies. 

Concerns about Russian government officials and citizens using crypto to side-step sanctions prompted by the invasion of Ukraine in 2022 have swirled for the past year

US-based cryptocurrency exchanges and wallet providers must follow the same reporting and KYC regulations as banks, but decentralized exchanges and marketplaces in other countries may offer a workaround.

As for Legkodymov’s case, his next hearing has not yet been scheduled. His attorneys can appeal the bail decision.


Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the On the Margin newsletter.

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.

Tags

Upcoming Events

Salt Lake City, UT

MON - TUES, OCT. 7 - 8, 2024

Blockworks and Bankless in collaboration with buidlbox are excited to announce the second installment of the Permissionless Hackathon – taking place October 7-8 in Salt Lake City, Utah. We’ve partnered with buidlbox to bring together the brightest minds in crypto for […]

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

Research Report Templates.png

Research

ZKPs enable efficient offchain transaction processing and validation, resulting in increased throughput and reduced fees. Solana's ZK Compression leverages ZKPs to minimize onchain storage costs, while Sui's zkLogin streamlines user onboarding by replacing complex key management with familiar OAuth credentials.

article-image

Mt. Gox creditors are finally getting their bitcoin back — even if it’s only one click away from being sold

article-image

Plus, is Polymarket this cycle’s breakthrough mainstream app?

article-image

The crypto asset manager lowered its planned fee from 0.25% to 0.15%, undercutting its competitors

article-image

Plus, a look at planned ETH ETF fees and how they differ from their BTC counterparts

article-image

North Korea suspected in breach of Indian exchange’s multisig wallet

article-image

Plus, Sanctum’s CLOUD token has officially launched — but not without problems