A Russian national who founded a cryptocurrency exchange that evaded U.S. regulations and became a haven for the proceeds of criminal activity has been arrested, federal officials said Wednesday.
Prosecutors allege that Legkodymov’s China-based cryptocurrency exchange, Bizlato Ltd., of which he served as majority owner, did not implement required anti-money-laundering safeguards and required only minimal identification from its users, even permitting them to supply information belonging to “straw man registrants,” people serving as cover for the users.
“Operating offshore or moving your servers out of the continental U.S. will not shield you,” Deputy Attorney General Lisa Monaco said at a Wednesday news conference. “And whether you break our laws from China or Europe, or abuse our financial system from a tropical island, you can expect to answer for your crimes inside a United States courtroom.”
The charge Legkodymov faces carries a maximum penalty of five years in prison upon conviction. Legkodymov, 40, was in custody Wednesday, and it was unclear if he had a lawyer who could comment on his behalf.
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