U.S. authorities have accused crypto exchange, Bitzlato, of laundering funds worth over $700 million.
Even more, the world’s largest cryptocurrency exchange, Binance, has been named a counterparty in an order against the far lesser-known crypto exchange, Bitzlato.
According to the order from the Treasury Department’s Financial Crimes Enforcement Network (FinCEN), Binance was mentioned as one of the sending and receiving counterparties associated with Bitzlato.
The order read:
“Approximately two-thirds of Bitzlato’s top receiving and sending counterparties are associated with darknet markets or scams. For example, Bitzlato’s top three receiving counterparties, by total amount of BTC received between May 2018 and September 2022, were: (1) Binance, a VASP [virtual asset service provider]; (2) the Russia-connected darknet market Hydra; and (3) the alleged Russia-based Ponzi scheme “TheFiniko,”
However, the top three sending counterparties during the same period were Hydra, Local Bitcoins and TheFiniko.
Speaking about the order, a Binance spokesperson said:
“Binance is pleased to have provided substantial assistance to international law enforcement partners in support of this investigation. This exemplifies Binance’s commitment to working collaboratively with law enforcement partners worldwide,”
FinCEN has formally lablled Bitzlato as a primary money-laundering concern that typically cuts off a business from the global financial system and the order seeks to ban the exchange from transmitting funds between all covered financial institutions.
Earlier this week on Tuesday, Bitzlato’s Russian founder, Anatoly Legkodymov, was arrested in Miami and the prohibiting order becomes effective on the 1st of February, 2023.