Non-custodial peer-to-peer crypto exchange Bitzlato was little known to some before the United States Department of Justice (DOJ) cracked down on it on January 18. It was co-founded in 2016 by the recently arrested Russian citizen Anatoly Legkodymov.
According to a Russian source, Anatoly Legkodymov owns 73.4% of Bitzlato, which has an office on the high floor of the Federation Tower in Moscow, where accepted trades of $100,000 or more. Legkodymov and his main partner in Bitzlat are also said to be involved in the Russian company A-HVT, which distributes crypto-mining equipment.
Legkodymov has had a long and colorful history in the crypto industry dating back more than a decade. His earliest post on the BitcoinTalk forum dates back to 2011, where he described the events that led to the loss of more than 50 BTC:
Legkodymov described the process of opening the Bitzlato exchange on the online forum in 2017:
“My team and I analyzed numerous failure scenarios, including simulating a hacking attack by exchange owners and operators, and found a solution that allows us to operate a Bitcoin exchange in a highly secure manner.”
“He received $206 million from darknet markets, $224.5 million from fraud, and $9 million from ransomware attackers.”
Illegal and risky transactions accounted for 48% of the company’s business at the time, according to the report.
The Justice Department said it would hold a conference to discuss the charges earlier in the day, but did not say which companies would be involved. This led many who had speculated about the involvement of much bigger names to react with a certain amount of irony:
Someone told the DoJ that a 7 digit crime in crypto is called a common wednesday. https://t.co/zpV6LcLrpW
— Dylan LeClair (@DylanLeClair_) January 18, 2023
You kind of understand how completely irrelevant Bizlato is when you realize that 12 minutes ago not a single ENS degen thought it was worth signing up for pic.twitter.com/QpXqMy0HIs
— anon.eth (@player1_eth) January 18, 2023
One lawyer comments online she called action against Bitzlat “a suggestion for future actions, perhaps even one that is highly anticipated today”.
Others have seen dark forces at work in taking down this darknet actor:
Brooklyn accused Anatoly Legkodymov, a Russian national and senior manager of Bitzlato Ltd. (bitzlato)
luke bitcoin core dev.
Anatoly seems to have been a bitcoin og.
they’ve been business partners since the OG days…
luke was mysteriously “hacked” a few weeks ago for all his btc
— Sn/Fr-axgener 200x (@napgener) January 18, 2023
Bitzlato himself was apparently unaware of the action that was about to overtake him. On January 18, she tweeted the morning exchange rates to her 1,488 followers.
Lol you are in jail
— UnsafeMedicine (@unsafemedicine) January 18, 2023