The exchange was found to be engaging in activities such as money laundering and the facilitation of transactions. The transactions are said to be associated with illegal activities.
On January 19th, the Justice Department took legal action against Anatoly Legkodymov. The guy is said to be the senior executive of Bitzlato. A cryptocurrency exchange based in Hong Kong that operates around the world. The charge was for “conducting a money transmitting business without meeting U.S. regulatory guidelines such as anti-money laundering protocols.”
According to the Justice Department, Bitzlato positioned itself as an “unquestioning cryptocurrency exchange.” However, in order to collect hundreds of millions of dollars from criminal activities.
The Department of Justice has stated that it will be seeking to recover the funds that were processed through the exchange. Additionally to any profits from those transactions.
They have also stated that they will be working to identify other individuals and entities who may have been involved in facilitating the illicit activities.
This is yet another example of how cryptocurrency exchanges are being targeted by authorities. Reason being they have a high potential for misuse by criminals.
Furthermore, it is also a reminder that anyone considering investing in or trading cryptocurrencies. They are advised to take the necessary steps to ensure they are only dealing with legitimate exchanges.
Regulations are constantly being put into place to help protect investors. Additionally, it is important for everyone to remain vigilant when using cryptocurrency services.
Caution to individuals in cryptocurrency
As the investigation continues, it is likely that more details will emerge. Furthermore, it is yet another reminder of the need to remain aware of the associated risks when working with digital currencies. Individuals are advised to use only use reputable exchanges.
As always, anyone considering investing in or trading cryptocurrencies should do their own due diligence. Furthermore, this will ensure that the service providers they are using have the necessary safeguards in place. By taking these measures, investors can help protect themselves against fraud and other illegal activities.
