The European Union Agency for Law Enforcement Cooperation released a statement on Monday detailing its latest action against troubled exchange Bitzlato. Per the release, Europol is now in possession of digital wallets holding $19M worth of crypto which, Europol alleges the firm procured unlawfully. Europol’s latest release also claims that about half of Bitzlato’s transactions […]
The European Union Agency for Law Enforcement Cooperation released a statement on Monday detailing its latest action against troubled exchange Bitzlato. Per the release, Europol is now in possession of digital wallets holding $19M worth of crypto which, Europol alleges the firm procured unlawfully.
Europol’s latest release also claims that about half of Bitzlato’s transactions are tied to criminal activities.
Agencies Join Forces to Target Bitzlato
The strike on the crypto firm occurred via an operation in which Europol was heavily involved in. However, according to the agency’s media report, French and American law enforcement bodies spearheaded the operation targeting the firm. Law enforcement and judicial authorities from Belgium, Cyprus, Portugal, Spain, and the Netherlands also took part in the crackdown.
As stated earlier, the officials confiscated crypto assets worth roughly EUR 18M, however, the haul went further. Vehicles and electronic equipment were part of the seizure, and the authorities froze over 100 client accounts holding a total of EUR 5OM.
Europol’s report shared additional details of the strike against Bitzlato and what the investigation brought to light. The agencies allege that Bitzlato aided the movement of ill-gotten funds and their conversion into rubles on a large scale. The assets that went through the firm reportedly add up to EUR 2.1 billion (BTC 119 000).
Bitzlato allowed the rapid conversion of various crypto-assets such as bitcoin, ethereum, litecoin, bitcoin cash, dash, dogecoin, and USDT into Russian rubles,” said the release.
“Nearly 50% of All Bitzlato Operations Have Criminal Ties”
A thorough examination revealed that a significant portion of transactions on Bitzlato can be traced to illicit activities. While the conversion of crypto-assets into fiat currencies is lawful, 46% of the assets that have gone through the firm have criminal ties. Notably, some of these suspicious transactions have connections to entities on the OFAC’s (Office of Foreign Assets Control) blacklist.
Bitzlato has also reportedly funneled funds involved in cyber scams, money laundering, ransomware, and child abuse material. Europol’s report brought up the Russian language dark web marketplace Hydramarket which the authorities took down last year. However, 1.5M BTC transfers reportedly took place between Bitzlato clients and what was tagged the “world’s largest and oldest darknet.”
The DOJ noted in a statement that Hydra was Bitzlato’s biggest partner.
Bitzlato Founder in Custody
This is not the first time Bitzlato has answered to the authorities this month. On Jan 18, news emerged that US officials from a crypto-focused enforcement team had taken Bitzlato creator Anatoly Legkodymov into custody. Agencies across Europe lent a hand in the crackdown, enabling the arrest of 4 other persons with ties to the crypto firm. So far, the authorities have conducted 8 house searches, 4 in Spain, 1 in Cyprus, 2 in Portugal, and 1 in the US. These have yielded 1 arrest in the US and Cyprus and 3 in Spain.
Following Legkodymov’s arrest, he was brought before a U.S. District Court for the Southern District of Florida. However, his potential charges are yet to be defined.
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