the main suspect in an investigation into the Bitzlato platform released in France

Mykhailo L., a 28-year-old Ukrainian whom French justice considers to be its main suspect in an investigation into the cryptocurrency exchange platform Bitzlato, was released at the end of September, Agence France-Presse learned (AFP) from a source close to the matter on Saturday October 12. Paris accuses the platform of having laundered criminal assets until the beginning of 2023. According to the same source, the Paris Court of Appeal placed this man under judicial supervision on September 24.

In January 2023, Washington and Paris jointly announced an international search with the arrest of Anatoli Legkodimov, Russian founder and main shareholder of Bitzlato, a man in Portugal, one in Cyprus and three others in Spain , including Mykhailo L. Twenty million euros in criminal assets had also been seized. Bitzlato was then presented by the Paris prosecutor’s office as a platform allowing “rapid conversion of cryptoassets (…) in rubles » in order to “launder funds obtained through illegal activities (scams, sales on darknet markets [la partie obscure du Web non référencée par les moteurs de recherche] and ransomware…) ».

According to elements of the investigation obtained by AFP, the investigation into this platform founded in 2017 by four Russian shareholders, including Mr. Legkodimov, and hosted on French servers, began with police intelligence. . Investigators quickly suspected that Bitzlato was helping to trade “in a few minutes” et “anonymously” on a global scale of cryptocurrencies against rubles. According to the prosecution, the platform did indeed put in place a system to verify the identity of its customers and the origin of their assets, but far too late – in spring 2022 – and in an incomplete manner.

At least five people indicted

In a January 2023 report, Chainalysis, a specialist in the study of cryptocurrency transactions, estimated that 26% of Bitzlato’s financial flow since 2019 was linked to cryptoassets directly linked to illicit activities, which represents 650 million dollars. This analysis is contested by another source close to the file consulted by AFP. American justice has affirmed that Bitzlato carried out most of its transactions with « Hydra Market »defunct sales platform for « darknet »judicially closed.

Bitzlato is thus associated with drug trafficking, the financing of the Russian invasion in Ukraine or, on the French side, fraud in the partial activity compensation system linked to the Covid-19 epidemic. Were its leaders aware of this? Yes, according to some of the 500,000 messages found in the « Mattermost »internal messaging. Mr. Legkodimov and his main partner, both Russians and who have so far escaped French justice, are said to have mentioned their knowledge of the doubtful origin of part of the company’s turnover in 2018-2019. They even mentioned the possibility of taking 3% commission on these suspicious transactions, compared to 0.5% usually on others.

What about Mykhailo L.? Upon his arrival in France from Spain in March 2023, he initially minimized his responsibility and disputed any infringement, claiming that his authority was limited to the marketing sector only. Other interviewees, on the contrary, presented him as the CEO, i.e. a “essential element” of the Bitzlato device, with a “decision-making power” and knowledge of control deficiencies. Mr. Legkodimov, on parole since July 2024 after eighteen months of detention and a guilty plea to money laundering in New York, thus rejected on Mykhailo L., before the French investigating magistrates in February, a good part of the Bitzlato’s mistakes in user control. To date, at least five people are indicted in France.

Lawyer for Mykhailo L. contacted by AFP, Beryl Brown said her ” relief “ after this release. “These are files where the question of the responsibility of these Internet platform employees (cryptocurrency or even messaging) in the use made of them by organized crime will always arise. For my part, I consider that there is no proof of their involvement”she added. Lawyer for another defendant, Frédéric Belot, is concerned: “Won’t the French justice system come across lampoons who know nothing about it, while Mr. Legkodimov has been released in the United States? »