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Crypto giant Binance has processed about $346 million in bitcoin for crypto exchange Biturat. The founder of Biturat was arrested by US authorities last week on suspicion of running a “money laundering engine,” Reuters reported, citing blockchain data.
On January 18, the U.S. Department of Justice announced that it had indicted Anatoly Legkodimov, co-founder and majority shareholder of Bitzrat. Anatoly Legkodimov is a Russian national living in China who ran an unlicensed exchange business that “fueled the high-tech axis of cryptocurrency crime” by processing cryptocurrencies. $700 million of illicit funds.
The Justice Department said Bitzrath advertised its lax background checks on its customers, and when the exchange asked users for identity information, it said, “They provided information belonging to the registrants of ‘Straumann’. I have repeatedly given permission to do so,” he added.
Binance, the world’s largest cryptocurrency exchange, was one of Bitzrat’s top three counterparties in terms of the amount of Bitcoin it received from May 2018 to September 2022, according to a US Treasury Department financial crimes filing. Enforcement Network (FinCEN) announced last week.
Binance is the only large cryptocurrency exchange among Bitzlato’s major counterparties, FinCEN said. Other companies that have done business with Bitzlato are Russian-language “darknet” drug marketplace Hydra, a small exchange called LocalBitcoins, a cryptocurrency investment website called Finiko, and FinCEN, a “Russian-based Suspected virtual currency Ponzi scheme.” FinCEN did not elaborate on the scale of the entity’s interactions with Bitzlato.
Bitzlato registered in Hong Kong is a “major money laundering concern” related to illicit finance in Russia, FinCEN added. It is prohibited to send money to It does not list Binance or any other individual company as being subject to the ban.
A Binance spokesperson said in an email that it “provided material assistance” to help international law enforcement agencies investigate Bitzlato. The company is engaged in “cooperation” with law enforcement agencies, they added, and declined to provide details about its dealings with Bitzrath or the nature of its cooperation with such agencies.
Reuters was unable to contact Bitzrath, whose website said it had been seized by French authorities. Legkodimov has not made a public comment since he was arrested in Miami last week, nor has he responded to an emailed request for comment.
A lawyer for Finiko founder Kirill Doronin said FinCEN’s statement was “unfortunate for him. [Doronin], he wants the cryptocurrency to be returned to investors from those who stole it. According to lawyer Dmitry Grigoriadi, Doronin did not use investors’ cryptocurrencies during Finico’s activity.
The operator of Hydra, which was indicted in the US last year, did not respond to a request for comment.
Finland-based LocalBitcoins said it does not have “any kind of cooperation or relationship” with Bitzlato. Some peer-to-peer (P2P) traders on LocalBitcoins said, “He at BitZlato should have traded on the P2P market as well,” adding, “There has been virtually no trading between LocalBitcoins and BitZlato since October 2022.” Added.
Reuters has evidence that Binance, LocalBitcoins, or Finiko transactions with Bitzlato, which the Justice Department described as “a haven for criminal proceeds and funds intended for use in criminal activities,” violated rules and laws. Is not.
However, one former U.S. banking regulator and former law enforcement official said that because of Binance’s position as one of the top counterparties, the Department of Justice and the U.S. Treasury Department are conducting Binance’s compliance checks with Bitzrat. said he would pay attention to
“I would not call it a warning shot to the bow, I would call it a guided missile,” said Ross Delston, citing FinCEN for Binance and LocalBitcoins.
The Justice Department and Finsen declined to comment.
According to a review of previously unreported data, Binance has sold more than 20,000 bitcoins worth $345.8 million at the time of trading in nearly 205,000 transactions on Bitzlato from May 2018 until its closure last week. has been moved. The figures were compiled by leading US blockchain researcher Chainalysis and confirmed by Reuters.
Data shows that around $175 million worth of bitcoin was transferred from Bitzlato to Binance during that period, with Binance being the largest recipient.
According to Chainalysis data, a total of around $90 million has been transferred after Binance said it would ask users to provide identification to combat financial crime after August 2021. Binance said in his blog last year that such checks deal with “illegal fundraising and money laundering.” Reuters was unable to determine whether Binance applied the ID requirement to Bitzlato.
darknet market
Chainalysis, which is used by US authorities to track illicit cryptocurrency flows, warned in February last year that Bitzlato was risky. In a report, Chainalysis said that nearly half of Bitzrat’s remittances between 2019 and 2021 were “illegal and risky” and identified about $1 billion in such transactions.
The US action against Bitzlato comes as the Department of Justice investigates Binance for possible money laundering and sanctions violations. Some federal prosecutors concluded that the evidence gathered warranted indictment against executives, including founder and CEO Changpeng Zhao, Reuters reported in December.
Reuters was unable to confirm whether Binance’s deal with Bitzlato is under review.
Binance, which has not disclosed the location of its core exchange, has processed at least $10 billion in payments for criminals and companies trying to evade US sanctions, according to blockchain data, courts and companies. Reuters found in a series of articles last year based on the records of
Former executives and company documents also reveal that Binance deliberately undermined anti-money laundering measures to evade regulators in the U.S. and elsewhere.
Binance disputed the article, saying the calculation of illegal funds was inaccurate and the description of compliance controls was “outdated.” The exchange said last year it was “promoting higher industry standards” and aimed to improve its ability to detect illegal crypto activity.
Both Binance and Bitzlato were key counterparties in Hydra, the world’s largest darknet drug marketplace. The Russian-language site was shut down by US and German authorities last year. The Justice Department said Bitzlato exchanged more than $700 million of his cryptocurrency with his Hydra, either directly or through an intermediary.
In an article published last June, Reuters reviewed blockchain data and found that Hydra buyers and sellers used Binance to sell about $780 million worth of crypto between 2017 and 2022. I indicated that I made the payment. A Binance spokesperson said at the time that the numbers were “inaccurate and exaggerated.”
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