{"id":75132,"date":"2023-03-07T07:00:00","date_gmt":"2023-03-07T05:00:00","guid":{"rendered":"https:\/\/forklog.com\/en\/?p=75132"},"modified":"2025-09-10T09:55:54","modified_gmt":"2025-09-10T06:55:54","slug":"cleaning-up-the-dirt-which-bitzlato-counterparties-face-new-criminal-charges","status":"publish","type":"post","link":"https:\/\/forklog.com\/en\/cleaning-up-the-dirt-which-bitzlato-counterparties-face-new-criminal-charges\/","title":{"rendered":"Cleaning up the dirt: which Bitzlato counterparties face new criminal charges?"},"content":{"rendered":"

On January 17, the French public prosecutor’s office, together with partners from Spain, Portugal and Cyprus, seized the infrastructure<\/a> of the Bitzlato cryptocurrency exchange and detained five people affiliated with the company<\/a>.<\/p>\n

According to Europol, in total the exchange converted assets tied to criminal activity worth around \u20ac1 billion ($1.08 billion)<\/a>. In the indictment of founder Anatoly Legkodymov, in particular, laundering $700 mln<\/a>, linked to the closed darknet marketplace Hydra.<\/p>\n

Among Bitzlato’s counterparties<\/a> are major bitcoin exchanges, P2P platforms, mixers, darknet marketplaces and pyramid schemes. Tracking of illicit funds in the case has already led to freezes of user accounts<\/a> on several CEX<\/span>.<\/p>\n

Synthesising with ForkLog\u2019s analysts, we examined which entities that interacted with Bitzlato could become subjects of new investigations and how this could affect their users.<\/p>\n

How investigators traced Bitzlato?<\/strong><\/h2>\n

Experts consulted by ForkLog are convinced that aiding the laundering of illicit funds drew law enforcement\u2019s attention to Bitzlato. The exchange had been under surveillance even before the seizure of Hydra\u2019s servers<\/a> in April 2022.<\/p>\n

According to Chainalysis<\/a>, over $966 million \u2014 48% of the platform\u2019s total transaction volume \u2014 were linked to illicit or high\u2011risk operations. Of these, $206 million came from darknet marketplaces, $224.5 million from various kinds of fraud, and $9 million from extortionist groups.<\/p>\n

\"Cleaning
Sources of illicit funds entering Bitzlato. Data: Chainalysis.<\/figcaption><\/figure>\n
\n

\u00abIn addition to Hydra, Bitzlato actively interacted with sanctioned platforms, such as Chatex, Blender.io, with wallets of various hacker groups and fraudulent projects, for example \u2018Finiko\u2019. In combination with the absence of proper AML\/KYC procedures this led to such consequences\u00bb, \u2014 said representatives of the BitOK tracking, control and analytics service.<\/p>\n<\/blockquote>\n

These conclusions are confirmed by the FinCEN report<\/a>.<\/p>\n

In addition, among Bitzlato\u2019s allegations are aiding in laundering funds to terrorists<\/a>, notably Jama\u2019at at-Tauhid wal-Jihad and Hamas<\/a>, added to the team.<\/p>\n

According to them, the confirmed amount of seized assets of the exchange at this stage stands at about 144 BTC. By contrast, Bitzlato representatives reported the seizure of the platform\u2019s hot wallet, which contained \u201caround 35% of users\u2019 funds across all cryptocurrencies at the time of the operation<\/a>.\u201d They did not disclose a precise figure, citing fluctuations in exchange rates.<\/p>\n

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\u00abThe total number of wallets associated with Bitzlato exceeds 257,000; the overwhelming majority are Bitcoin addresses. All of them have been identified by us and our colleagues as high\u2011risk addresses rated at 7\u201310. Naturally, most are users\u2019 deposit addresses, but there are about 20 hot and cold wallets of the platform\u00bb, \u2014 noted the experts at HAPI Labs.<\/p>\n<\/blockquote>\n

BitOK specialists provided a more granular breakdown of the wallets:<\/p>\n