Crime via cryptocurrency is not a new problem. The same qualities that appeal to legitimate users of crypto — anonymity, ease of transfer across borders, and lack of limiting regulations — also make it a powerful tool for criminal activity. As Fordham University reports, criminals have been using cryptocurrency ever since crypto became widely available.
In the case of Bitzlato and Anatoly Legkodymov, the issue appears to be money laundering. That’s a recurring problem with cryptocurrency, all the way back to Mt. Gox in the 2010s: money designed to encrypt all of its owners’ identifying details naturally appeals to people with money obtained in ways they’d rather not disclose. Several different authorities are cracking down on laundering and other malfeasance through crypto; per the Justice Department, the Legkodymov investigation included the DoJ, the Department of the Treasury, and the French government.
With so many stories of incompetence and malfeasance, it’s easy to dismiss crypto as a corrupt fad. It’s worth remembering that for every Legkodymov or Bankman-Fried, there are literally millions of people – Statista says 400 million worldwide as of November 2022 — who use cryptocurrency without violating the law. Legal cases against high-profile malefactors will hopefully lead to constructive reform in the cryptocurrency ecosystem, minimizing the potential for criminal exploitation in the future.