The owner of China-based cryptocurrency exchange Bitzlato was arrested in Miami on Wednesday, along with five associates in Europe.

Daaaamn, you ain't gonna believe this sh*t. The co-founder of Bitzlato, a Hong Kong-based crypto exchange, got arrested in Miami for allegedly laundrying over $700 million in illicit funds. Apparently, Bitzlato conducted over $700 million in illicit cryptocurrency exchanges with users of Hydra Market, a Russian darknet marketplace for drugs, money laundering services, and stolen financial information. The co-founder, Anatoly Legkodymov, is facing a maximum penalty of five years in prison if convicted. The names of his associates arrested in Europe are not disclosed yet.

US and German officials said that Hydra Market had facilitated ransomware attacks before it was shut down by German authorities last year. The US Treasury Department's Financial Crimes Enforcement Network (FinCEN) labeled Bitzlato as a "primary money laundering concern" in connection with the Russian government. And get this, French authorities worked alongside the US and other international authorities to seize Bitzlato's crypto assets and dismantle its digital infrastructure.

Turns out, Bitzlato played a critical role in facilitating transactions for the Conti ransomware group and other global ransomware actors, including those operating out of Russia. FinCEN claims that Bitzlato serves as a VASP (virtual asset service provider) that ultimately enables the profitability of ransomware attacks and, at least in the case of Conti, advances the political and economic destabilization interests of the Government of Russia.

And guess who one of the top receiving counterparties from Bitzlato was over the last few years? Yup, you guessed it, massive crypto exchange Binance. But don't worry, they claim they "provided substantial assistance to international law enforcement partners in support of this investigation."

The Department of Justice (DOJ) claims that Bitzlato did not implement sufficient anti-money laundering safeguards and opened itself up to criminals as a no-questions-asked cryptocurrency exchange.

In a report last summer, blockchain analytics firm Chainalysis said Bitzlato had received some $966 million in “illicit and risky” crypto from addresses that were frequently linked to criminal activity. That included $9 million attributed to ransomware.

Bitzlato worked mainly on the markets of Asian and CIS countries, so the news about the arrest of Bitzlato's co-founder, announced with such fanfare, discouraged many crypto enthusiasts.

Some of them ironically noted that they were hearing about such a crypto exchange for the first time.

Others sneered at the fact that the US authorities are devoting so much time and effort to fighting little-known trading platform, while US investors have suffered more from the collapse of FTX, Alameda, Voyager and other crypto companies that work closely on the US market.