Anatoly Legkodymov, the founder of China-based crypto firm Bitzlato, was arrested under suspicion of money laundering related to illicit Russian finance.
The good news of the last week is that Bitcoin (BTC) continued to rebound, making around 10% up from Jan.16 to Jan. 23. But it has yet to change a worrying trend of crypto companies making headlines due to their troubles with the law.
The United States Department of Justice launched a “major international cryptocurrency enforcement action” against China-based crypto firm Bitzlato and arrested its founder, Anatoly Legkodymov. The enforcers consider Bitzlato to be a “primary money laundering concern” connected to Russian illicit finance. While the exchange attracted little attention until the DOJ action, it had received $206 million from darknet markets, $224.5 million from scams, and $9 million from ransomware attackers.
The United States Financial Crimes Enforcement Network (FinCEN) states the Binance cryptocurrency exchange was among the “top three receiving counterparties” of Bitzlato in terms of Bitcoin transactions. However, it doesn’t mention Binance among the top sending counterparties to the malevolent exchange.
The United States Securities and Exchange Commission (SEC) has followed the Commodity Futures Trading Commission (CFTC) in filing parallel charges against the crypto user allegedly behind a multimillion-dollar exploit of decentralized exchange Mango Markets. Avraham Eisenberg is alleged of manipulating Mango Markets’ MNGO governance token to steal roughly $116 million worth of cryptocurrency from the platform.
Iran and Russia want to issue new stablecoin backed by gold
The Central Bank of Iran is reportedly cooperating with the Russian government to jointly issue a new cryptocurrency backed by gold. A “token of the Persian Gulf region” would serve as a payment method in foreign trade. The stablecoin aims to enable cross-border transactions instead of fiat currencies like the United States dollar, the Russian ruble or the Iranian rial. Reportedly the potential cryptocurrency would operate in a special economic zone in Astrakhan, where Russia started to accept Iranian cargo shipments.
EU postpones final vote on MiCA for the second time
The final vote on the European Union’s (EU) much-awaited set of crypto rules, known as the Markets in Crypto Assets regulation (MiCA), was deferred to April 2023. It marks the second delay in the final vote, which was previously postponed from November 2022 to February 2023. The latest delay is due to a technical issue where the official 400-page document couldn’t be translated into the 24 official languages of the EU. Legal documents like the MiCA, which are drafted in English, must comply with EU regulations and be published in all 24 official languages of the union.
Japanese regulators want crypto treated like traditional banks
“If you like to implement effective regulation, you have to do the same as you regulate and supervise traditional institutions,” the deputy director-general of the Financial Services Agency’s Strategy Development and Management Bureau, Mamoru Yanase, has told the media. Yanase added that countries “need to firmly demand” consumer protection measures from crypto exchanges. Demands were also laid down for money laundering prevention, strong governance, internal controls, auditing and disclosure for crypto brokerages.
Further reads
Going cashless: Norway’s digital currency project raises privacy questions
Today’s iteration of DeFi could be criminalized by 2025. Here’s how its replacement could look
FTX fallout: SBF trial could set precedent for the crypto industry
Crypto to play ‘major role’ in UAE trade, according to its foreign trade minister
Central African Republic eyes legal framework for crypto adoption
