Bitzlato stock exchange scandal. And what about Binance?

Bitzlato stock exchange scandal. And what about Binance?

The US Department of Justice started talking about the Bitzlato cryptocurrency exchange, or rather, everything has already been decided. The exchange has already been blocked, and its founder has been arrested.

Cryptus Exchange Binance, darknet marketplace Hydra and financial pyramid "Finico” entered the top three receiving counterparties of the Bitzlato exchange platform, which the US authorities accuse of laundering $ 700 million. This is stated in the FinCEN order.

A spokesperson for cryptocurrency exchange Binance said they are ready to provide law enforcement with "substantial assistance" in the investigation.

In this article, we will talk about the scandal around the Bitzlato exchange, and here Binance, and also share recommendations on what to do in this situation.

US blocks Bitzlato cryptocurrency exchange

On January 18, Washington announced that "international measures will be taken in relation to Crypto-currency". The market at that moment reacted with a fall, and specifically Bitcoin fell by -4.5%, but has already managed to correct and even grow. Why did the market fall?

There were no specifics in these words, so politicians were urged to wait for the press conference of the US Department of Justice.

Against the backdrop of this news, investors began to actively sell their assets, thereby reducing the price of cryptocurrencies. There were fears that we are talking about some kind of global and tough laws, regulations or an important incident.

At a press conference, the Ministry of Justice announced sanctions against the Bitzlato cryptocurrency exchange, or rather, its blocking and the arrest of its owner Anatoly Legkodymov in Miami.

The US authorities accuse the Bitzlato exchange of laundering $700 million worth of cryptocurrencies. According to them, the platform worked in China and worked closely with the Hydra darknet, legalizing drug proceeds and stolen personal data. It is noteworthy that Binance stated that they assisted the investigation and law enforcement agencies during the investigation.

Lisa Monaco, Deputy Attorney General of the United States:

“It doesn't matter if you're violating our laws from China or Europe. Or you're abusing our financial system from a tropical island. You will still answer for your crimes in the courtroom of the United States,” said Lisa Monaco.

The largest partner of the scandalous platform is Binance

This week, FinCEN (Financial Crime Enforcement Network) published an order stating that 2/3 of Bitzlato's main counterparties collaborating with or receiving cryptocurrency from him are associated with the dark web and / or fraud. Binance is listed as one of the largest partners that received the most bitcoins from Bitzlato from May 2018 to September 2022.

Hydra and Russian The Finiko only take second and third place. The biggest partners that sent BTC to Bitzlato are: Hydra, Local Bitcoins in Finland and TheFiniko.

It should be noted that an investigation into Binance has been launched in the US. The Department of Justice accuses the exchange of violating the AML (anti-money laundering) policy. Similar allegations have been made before, but the platform has dismissed all criticism.

A lawyer's opinion on the Bitzlato scandal

Bitzlato seems like a small exchange, but this reputation was made intentionally. If it were not a small exchange, then it would not be able to be used in criminal schemes.

We invite you to read what a cryptocurrency lawyer who specializes in exposing fraud and protecting the integrity of decentralized technologies has written.

Tweet Translation:

“The low popularity of Bitzlato was deliberate. It could not have served as the primary cryptocurrency exchange for Ransomware-as-a-Service (Ransomware) groups for the past 6 years if it had been modest. Surprisingly, the largest counterparty that the exchange worked with was Binance.”

Tweet Translation:

“This exchange was popular with ransomware groups and darknet marketplaces because it offered an ‘optional’ verification identity and minimum requirements for a protocol that works like anti-money laundering"

Tweet Translation:

“Bitzlato customers used wallets without identity verification to hide the trace of money. They could not exchange their cryptocurrency for Fiat with the help of Bitzlato, since it did not offer such an option. Binance was used for this"

Tweet Translation:

“The manager who was responsible for verification and anti-money laundering at Bitzlato had a total of one year of work experience. She worked at Bitzlato for 6 months before FinCEN closed the exchange."

Tweet Translation:

“Ransomware groups served by Bitzlato included Conti, which claimed to be Russian. There was also DarkSide, who was responsible for the attack on the American Colonial Pipeline system."

Tweet Translation:

Cryptocurrency exchange Bitzlato laundered over $700M for ransomware and dark web providers


In the end, we will give you a few recommendations and what you need to do in this situation:

  • Withdraw money from the exchange. The very first thing you need to do is withdraw money from Binance if you have ever been in contact with Bitzlato or other sanctioned exchanges. Otherwise, you risk having your funds blocked. Users have already begun to receive “letters of happiness” with notifications of blocking.
  • Store cryptocurrency in cold wallets. Exchanges are, of course, very convenient, but we would recommend that you store your cryptocurrency on hardware wallets. Especially if you have a decent amount and you are afraid of losing it.
  • Don't store money on Binance. There has been a lot of negativity floating around the stock market lately. If you are from the Russian Federation and keep money on Binance, then we recommend transferring them to a cold wallet or at least to other cryptocurrency exchanges that are not under sanctions.
  • What exchanges to use? We recommend: bybit, OK, MEXC и bitget.
  • P2P Arbitrage Schemes. If you have been actively using P2P arbitrage schemes, exchanges will soon start blocking you.


Bitzlato was actively used in P2P arbitrage schemes, that is, it was included in many exchange bundles, like many other P2P intermediaries, but the most important thing is that Binance and how things will go on is not clear.

In this article, we talked about the blocking of the Bitlzato cryptocurrency exchange, and here Binance, showed what the lawyer thinks about this, and also gave recommendations on what needs to be done in this situation.

Write in the comments what you think about the current situation.

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Комментарии (10)

  1. Wael77 28 February 2023 17: 49

    Thanks for the informative article Admin!

    A complaint
  2. Mihhha 24 January 2023 20: 55

    I'm shocked!!!! Especially about Binance!!!! 

    A complaint
  3. 4difeer666 23 January 2023 18: 39

    Thank you for the article!

    A complaint
  4. Akimskate 23 January 2023 14: 46

    Very interesting, thanks for the article!

    It really looks like the political games of the elites, just like FTX was. In the end, everything will come to a monopoly among the exchanges, some more influential people will force out the rest of the exchanges, and then regulate everything to the fullest. And among all the exchanges, binance most of all, as for me, looks like a monopolist, because for some more than 5 years of existence, it overtook all the other old men, and even led to a scam, and possibly swallowed up other exchanges, and also very willingly makes contact with law enforcement, discloses personal data upon request, and seizes accounts

    A complaint
    1. richmonkey_support 23 January 2023 15: 57

      Akimskate, with FTX weren't exactly political games. The exchange used the money of people who were stored there, investing in other projects. They had liquidity problems yet

      It's more like they want to knock Binance out of the market and create a negative around the cryptocurrency in order to withdraw money

      A complaint
      1. Akimskate 25 January 2023 01: 35

        I’m not a fan of conspiracy theories, but I came across an article in which it was said that the FTH is being held by people either from Democrats or Republicans, through which money laundering, financing of election campaigns, bribing voters, kickbacks for lobbying, etc. passed. But about the shortage of assets and liquidity - it was necessary for someone to disclose this information, because nothing just happens, and chances are unlikely when such amounts are discussed, followed by the disclosure of the audit results, and CZ himself personally forced this topic , then an even greater outflow of funds and the actual bankruptcy. 

        I personally do not claim that this is exactly what happened, it’s just that it was written quite plausibly, and not as chaotically as I wrote) 

        A complaint
        1. richmonkey_support 27 January 2023 12: 12

          Akimskate, I saw a lot of information that FTX often donated tidy sums to Democrats and Republicans, but there are no politicians to keep the exchange. Maybe it is, who knows

          About the shortage of assets and liquidity, it’s for sure that it was necessary to fix the guesses with something and described it in more detail

          A complaint
          1. UdayAS8 15 March 2023 22: 08

            the bottom line SBF was a fraudulent that used his influence for his own gain. such a Hippocrates, he was stealing money's people and make his image like an honest man

            A complaint
  5. Managerruslan 23 January 2023 13: 52

    Harder and harder with crypto, sweet pie didn't last long without control, it always felt like it was only a matter of time before they started fighting with unknown money

    A complaint
  6. Anzhel 23 January 2023 12: 54

    Thanks for the article, interesting facts

    A complaint