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Cryptocurrency exchange Binance reportedly processed nearly $346 million in crypto transactions for Bitzlato, the coin trading platform that was shut down in an international law enforcement operation. US authorities say the world’s largest digital asset trading platform was among the main counterparties of Russian-owned Bitzlato.

Blockchain Data Shows Binance Surpassed 20,000 BTC for Bitzlato Since 2018

Global crypto trading industry leader Binance reportedly transferred cryptocurrency worth nearly $346 million for Hong Kong-based Bitzlato, Reuters reported citing data from Chainalysis. Bitzlato was a little-known exchange until it was recently targeted in what US authorities have described as a “boosting blow to the crypto crime ecosystem”.

Last week, the Department of Justice announcement that Bitzlato’s co-founder and majority shareholder, Russian citizen Anatoly Legkodymov who lives in China, was arrested in Miami and charged with operating an unlicensed foreign exchange business that handled $700 million in illicit funds.

On Wednesday, the US Treasury’s Financial Crimes Enforcement Network (FinCEN) said Binance was the only major crypto exchange to transact with Bitzlato, and one of its top counterparties. Among the others was the darknet market HydraLocalbitcoins peer-to-peer (P2P) exchange and crypto investment scam Finikothe largest financial pyramid in Russia in recent years.

The Hong Kong-registered Bitzlato, better known to Russian-speaking users, was a “top money laundering concern” linked to Russian illicit finance, according to FinCEN. The bureau did not reveal details about the extent of said platforms’ transactions with Bitzlato, but said it would ban financial institutions from transferring funds to the exchange without specifying the entities it was referring to.

According to data compiled by blockchain forensics firm Chainalysis and seen by Reuters, Binance has moved more than 20,000 BTC for Bitzlato, worth $345.8 million at the time the transactions took place, between May 2018 and its closure. Bitcoin for around $175 million was transferred to Binance from Bitzlato during the period, making Binance its largest receiving counterparty, the report also notes.

Biggest Crypto Exchange Says It Helped Bitzlato Investigation

Binance has “provided substantial assistance” to international law enforcement to support their investigation of Bitzlato, an exchange spokesperson told the news agency via email, while declining to provide more information. details about the crypto giant’s dealings with Bitzlato or cooperation with authorities.

Finland-based Localbitcoins said it never had “any kind of cooperation or relationship” with Bitzlato while admitting that some P2P traders on its platform “would also have traded on Bitzlato’s P2P marketplace” , but pointing out that there have been no transactions between the two exchanges since October 2022.

Reuters noted that it has no evidence Binance, Localbitcoins or Finiko transactions with Bitzlato violated any laws or regulations. He was also unable to establish whether Binance’s relationship with Bitzlato is currently under review. Meanwhile, the US-led action against Bitzlato comes as the Justice Department investigates Binance for possible money laundering and sanctions violations.

A number of European countries are also involved in the investigation against Bitzlato. Last week’s announcement revealed that French law enforcement had taken down the platform’s digital infrastructure in the country and seized its website. Monday, Europol informed that four other members of the exchange team were arrested in Spain and Cyprus.

Keywords in this story

Binance, Bitcoin, Bitzlato, BTC, Crypto, Cryptocurrencies, Cryptocurrency, Europe, European, Europol, Swap, Trades, Finiko, Investigation, justice department, Law enforcement, LocalBitcoins, Russia, Russian, transactions, transfers, WE, WE

Do you expect Bitzlato’s alleged dealings with Binance and other crypto platforms to be further investigated? Share your thoughts on the subject in the comments section below.

Lubomir Tassev

Lubomir Tassev is a tech-savvy Eastern European journalist who loves Hitchens’ quote: “Being a writer is who I am, rather than what I do.” Besides crypto, blockchain and fintech, international politics and economics are two other sources of inspiration.

Image credits: Shutterstock, Pixabay, Wiki Commons

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