On Wednesday, the U.S. authorities accused the little-known cryptocurrency exchange, Bitzlato, of laundering $700 million and named Binance, the world’s largest crypto exchange, as a counterparty in the order.
The order, which came from the Treasury’s Financial Crimes Enforcement Network (FinCEN), stated that Binance was one of the top three receiving and sending counterparties associated with Bitzlato.
Along with Binance were Russia-connected darknet market Hydra, and the Russia-based “TheFiniko.”
According to CoinDesk, during the same period, the top three sending counterparties were Hydra, Local Bitcoins, and TheFiniko.
Binance put out a statement on the situation saying that it was:
“pleased to have provided substantial assistance to international law enforcement partners in support of this investigation. This statement exemplifies Binance’s commitment to working collaboratively with law enforcement partners worldwide.”
Bitzlato founder arrested
Anatoly Legkodymov, the founder of Bitzlato, was arrested on Tuesday night in Miami, and the Financial Times quoted Lisa Monaco, deputy US attorney-general, as saying:
“Today’s law enforcement actions put all of those who seek to exploit the cryptocurrency ecosystem on notice that the Department of Justice will use every tool . . . that we have to attack the criminal use of the dark net and cryptocurrency, and we are taking steps to address the crisis of confidence in the cryptocurrency markets, where criminals and fraudsters seek to operate beyond the reach of law enforcement.”
Hydra main culprit
Obviously, the implication of Binance in the law enforcement has made huge waves in the crypto sector, especially following on from the FUD that the exchange has endured over recent weeks.
However, it appears that the main culprit in the affair is Hydra. Prosecutors are alleging that Hydra accounted for at least 80% of all dark web crypto-related transactions in 2021, and that it received more than $5 billion in the years since 2015.
It was alleged that users of Hydra transacted more than $700 million in crypto before the dark marketplace was shut down in April of last year by German authorities.
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