Authorities described Legkodymov as the cryptocurrency exchange’s co-founder, saying the 40-year-old Russian helped run the company from the Chinese city of Shenzhen.
Legkodymov did not immediately respond to an email with questions, and messages left on Bitzlato’s automated Telegram support chat service were answered with the phrase: “Oops, sorry.”
Bitzlato has processed US$4.58 billion worth of cryptocurrency transactions since May 3, 2018, prosecutors said, adding a substantial portion constitutes “the proceeds of crime”.
It also broke rules requiring significant vetting of customers and failed to meet requirements aimed at preventing money laundering, authorities said. Archived versions of Bitzlato’s website noted that the site’s clients could register using “only your email”.
The charges were filed in conjunction with the US Treasury Department’s Financial Crimes Enforcement Network (FinCEN), which said it has prohibited certain transmittals of funds involving Bitzlato by any covered financial institution after labelling Bitzlato Ltd a “primary money laundering concern” related to Russian illicit finance.
Bitzlato knowingly serviced US customers, conducted transactions with US-based exchanges, was run using US online infrastructure – and, for at least some period of time, was being managed by the defendant while he was in the United States, prosecutors said.
By midday Wednesday, Bitzlato’s website was replaced by a notice saying that the service had been seized by French authorities “as part of a coordinated international law enforcement action”.
