Darknet’s Tolik of Bitzlato Forces Global Special Services to Act

The owner of Bitzlato cryptocurrency exchange, Anatoly Light Dadents, has pleaded guilty to managing Bitzlato, which facilitated money laundering for cybercriminals and drug dealers, resulting in the washing of over $700 million, according to the US Department of Justice.

Investigations have revealed that Light Dadents, who went by the aliases “Gandalf” and “Tolik”, purposefully created a conducive environment for laundering illicit funds. The Bitzlato exchange had minimal user identification requirements, allowing criminals to freely exchange and withdraw illegally obtained money.

Chainalysis, an analytical company, has reported that from 2019 to 2021, over $2 billion in cryptocurrency went through Bitzlato, with almost half of that sum associated with illegal activities. The darknet markets alone contributed over $224.5 million, while extortionist attacks accounted for roughly $9 million.

Of particular interest to investigators was Bitzlato’s connection with Hydra, the largest darknet market which was shut down in April 2022. Through Bitzlato, Hydra users exchanged cryptocurrency worth more than $700 million.

The US Department of Justice claims that Light Dadents had repeatedly been warned that the funds passing through Bitzlato were derived from criminal activities or intended for illegal transactions.

In January 2023, American authorities, in collaboration with their European counterparts, took down the infrastructure of Bitzlato and seized its domains. Light Dadents, who has been in custody in Brooklyn, United States since his arrest in January 2023, now faces a potential prison sentence of up to 5 years.

Source: US Department of Justice

Source: Chainalysis

/Reports, release notes, official announcements.