Cryptocurrency Exchange Binance is believed to have processed more than $346 million in crypto transactions for the now-defunct buying and selling platform Bitzlato. The platform was closed down by an international police operation and the US authorities allege that it was one of the major counterparties of the largest digital asset exchanging service. Bitzlato was a Russian-owned platform.
Blockchain Analysis Reveals that Binance Has Moved Over 20,000 BTC to Bitzlato Since 2018
As reported by Reuters, citing data from blockchain forensics agency Chainalysis, the world’s leading cryptocurrency trading platform Binance has transferred crypto assets worth nearly $346 Million to the small-scale Bitzlato exchange. Last week, the US Department of Justice announced that the co-founder and majority owner of Bitzlato, Russian national Anatoly Legkodymov, who resides in China, was arrested in Miami and charged with operating an illegal money-changing business that processed $700 million in illicit funds.
On Wednesday, the US Treasury’s Financial Crimes Enforcement Network (FinCEN) reported that Binance was the only significant crypto-exchange that transacted with Bitzlato and was one of its major counterparties. It included darknet marketplaces, peer-to-peer (P2P) exchanges, Localbitcoins, the crypto financing scam Finiko, and the largest pyramid scheme in Russia. However, the scale of these transactions was not disclosed by the office.
FinCEN also noted that it would prohibit financial institutions from transferring funds into the exchange without specifying which entities, but stated that it had identified the Hong Kong-registered Bitzlato as “a top money laundering concern” associated with Russian illicit finance. According to Chainalysis’ data, seen by Reuters, Binance has moved more than 20,000 BTC to Bitzlato since May 2018. The value of this transaction was $345.8 Million and Binance was the largest recipient. The report also noted that around $175 Million worth of Bitcoin was initially transferred from Bitzlato to Binance during the period.
Leading Crypto Exchange Claims to Have Helped in Bitzlato Investigation
A Binance spokesperson told Reuters in an email that the exchange had “provided substantial assistance” to international law enforcement to aid their investigation on Bitzlato, but declined to provide any further details on its dealings with Bitzlato or its cooperation with the authorities. Localbitcoins, based in Finland, also claimed that it had never had “any kind of cooperation or relationship” with Bitzlato. The platform admitted that it had some P2P sellers on its platform “who would also have been operating on Bitzlato’s P2P marketplace,” but no transactions between the two exchanges have been reported since October 2022.
Reuters could not confirm whether Binance’s transactions with Bitzlato were being reviewed and whether they violated any law or legal guideline. At the same time, the US-led crackdown against Bitzlato is affecting other European nations. Last week’s announcement revealed that French law enforcement officers had taken out the platform’s digital infrastructure from the country and also seized its website. On Monday, Europol reported that four other members of the team were arrested in Spain and Cyprus.
Further investigation into Bitzlato’s purported dealings with Binance and other crypto platforms is planned. Please share your thoughts on the subject in the comments section below.
