On December 6th, the owner of Bitzlato Ltd., a popular online cryptocurrency exchange, pleaded guilty to federal charges of illegally transmitting money for illicit purposes using his cryptocurrency market.

According to court records, the company Bitzlato was used to facilitate at least $700 million worth of illegal dealings. What’s more, the crypto market was also found to have strong ties to Hydra Market. Investigators determined that Hydra Market is a darknet market that was commonly used for facilitating drug transactions and other illegal activities.

Bizlato was also accused of handling significant money gained from illegal ransomware attacks. Even worse, it was alleged that the company knew (or should’ve reasonably known) that the money passing through their exchange represented criminal proceeds or was intended for illegal dealings.

Court records show that the cryptocurrency exchange became a hub for criminal activity due to the company’s minimal identification requirements. The company’s policy didn’t require the standard identity verification methods that most exchanges require – like a passport or government-issued license. The exchange didn’t even require a selfie as part of the identification process.

As a result, the exchange often accepted strawman details during the registration process. That way, when that account was used for illegal transactions, there was no way to tie the account to an actual person. This type of system violates the procedures for financial institutions that make it a requirement to “know-your-customer”.

Bitzlato was finally taken down when the National Cryptocurrency Enforcement Team from the US, the FBI, and France’s Cyber Crime Investigation Unit all came together to collect evidence against the crypto company.

As part of his sentencing, the owner of Bitzlato, Anatoly Legkodymov, has agreed to dissolve his business and the Hong Kong-registered global cryptocurrency exchange market. He will also forfeit around $23 million in seized assets.

Cryptocurrency Crimes and Their Consequences

Technological advancements over the past several decades have exploded. Cryptocurrency is a relatively new digital space, and governments, police agencies, and lawmakers around the world are still playing catch up in an attempt to regulate these new frontiers. That said, plenty of people around the world have been taking advantage of cryptocurrency markets and exchanges to facilitate illegal deals.

It’s important to understand that you can face criminal charges if you get caught up using digital markets to facilitate illegal business dealings, evade taxes, defraud individuals, or commit any other type of illegal offense. Just because you use the internet for anonymity doesn’t mean that your transactions actually are 100% anonymous or hidden. In many cases, the authorities can track down the culprits responsible for online marketplace dealings.

Have you recently been charged with a cryptocurrency crime? If so, then your best option is to hire a legal representative who can help you fully understand your charges, the consequences you could face, and how to strategize a good defense before your day in court. The right lawyer can help empower you to make good decisions that help you secure a better legal outcome.

Get in touch with our firm now for a free case evaluation to get started.