The Financial Crimes and Enforcement Network (FinCEN) has identified two of the top three receiving counterparties of Bitzlato, a Russian P2P exchange whose owner was recently charged with money laundering.
These two counterparties are Binance, the world’s largest cryptocurrency exchange, and Hydra, a darknet marketplace.
The FinCEN report indicated that the other receiving counterparties were a Russian Ponzi scheme called “The Finiko” and the top three sending counterparties were Hydra, Finnish P2P exchange LocalBitcoins, and ”The Finik.”
Most of the counterparties ”have evident ties to and/or significant operations in Russia,” the report alleges. U.S. Deputy Attorney General Lisa Monaco has announced a National Cryptocurrency Enforcement Team in 2021 to combat “crimes committed by virtual currency exchanges, mixing and tumbling services, and money laundering infrastructure actors.”
Breon Peace, the U.S. attorney at the Brooklyn, New York office that is prosecuting the case, said that Bitzlato allegedly made the exchange a haven for criminals through weak KYC policies.
A user could reportedly sign up with only an email address and no photograph.