>> thank you for being here.

today the department of justice has dealt a significant blow to the crypto crime ecosystem. the justice department agents and prosecutors are working in partnership with the treasury department and french law enforcement have disrupted this letter. a china-based cryptocurrency exchange that is notorious for laundering criminal proceeds

that funds the darknet. last night, agents of the fbi arrested anatoly. i'm joined by the assistant attorney general kevin breen. decent district of new york briand p spirit deputy director brian turner. deputy secretary of the treasury balding -- walled. today's actions put all of those who seek to exploit the cryptocurrency ecosystem on notice. the department of justice will use every tool working along with our partners, every tool that have to attack the criminal youth of the darknet and cryptocurrencies. we are taking steps to address the crisis of confidence in the

cryptocurrency market. last night in miami, fbi agents arrested a russian national and the founder and geordie owner of a hong kong registered cryptocurrency exchange. the charges allege that he operated this lotto, and a high-tech financial hub, as he put it, that catered to known crooks. he failed to implement safeguards required by u.s. law, safeguards that allow law enforcement to detect and investigate financial crimes. instead, this lotto facilitated the transmission of hundreds of millions of dollars in illicit funds, feeling darknet

marketplaces and laundering the proceeds of ransomware attack. for example, as alleged, this lotto was a crucial financial resource for the notorious hydrant darknet market. the destruction i announce from this podium last april, with our german partners. now hydrant was the world's longest running and largest darknet marketplace. it is responsible for 80% of the worlds darknet transaction. together, a hydra and him formed a high-tech access of crypto crime. hydra buyers funded the purchases of illegal drugs, stolen financial information and hacking tools from crypto accounts hosted at this area.

sellers of these illegal goods and services at hydra, is sent criminal proceeds. all to the tune of 700 million dollars in direct and indirect transfers between 2018 and 2022. now i have said before, we would go after is the entire ecosystem that allowed cyber criminals and actors to flourish. today's action and with the disruption of hydra reflects another critical step in executing on that strategy. at the time of the arrest and continuing into the early hours this morning, the departments international and domestic partners engaged in a coordinated campaign of disruption. that campaign includes law enforcement actions and multiple

european countries, the seizure of servers and enforcement actions by the treasury department in the united states. these actions show not only the broad scope of the defendant's alleged crimes, but also the international net dropped by law enforcement to stop him and business partners. with these actions, today marks the and of the hydra crypto crime access. we busted the business model of the cyber criminals that he supported. and coordinated operations against them using all tools and designs for maximum inc. -- impact are the linchpin against cybercrime. our actions mark the most significant enforcement against a cryptocurrency exchange by the

national cryptocurrency enforcement team. launched last year following a comprehensive cyber review led by my office. to all of those exploding the cryptocurrency ecosystem, to enable crypto crime, we have a clear message. we will not only target hackers, sponsors and criminals that mask their profits in cryptocurrency. we are also unleashing the full force of the department of justice on the illicit actors and anything that supports cyber criminals, like hydra and bitzlato. moving your service after the u.s. will not shield you. whether you break our laws from china or europe, or abuse our financial systems from a tropical island, you can expect answer for your crimes inside a u.s. courtroom. i want to think the asians,

analysts and prosecutors who worked diligently -- agents, analysts and prosecutors who worked diligently. and thanks to foreign partners and treasury department for collaboration in this and other cryptocurrency and cyber crime cases. now we turn the podium over to assistant attorney general. >> thank you deputy attorney general, when the department announced the creation of a national cryptocurrency enforcement team in late 2021, we set forth the blueprint on how they would disrupt criminal abuse of the cryptocurrency e -- ecosystem. we named choi an accomplice on -- knowing and seizing department prosecutor to begin such first director.

we said that they would investigate those who enabled the use of digital access to facility -- facilitate crime. with focus on virtual currency exchanges and services. they said they would enhance the departments -- with domestic and foreign partners and aggressively investigate crimes involving cryptocurrency. today's actions against bitzlato , the first public action are precisely what we had a mind. as the deputy general describes, bitzlato it is a cryptocurrency exchange that facilitated illicit activities by making it easier for bad actors, including ransomware groups and drug web drug pushers to conceal their identities and profit from their misconduct.

we were able to accomplish this by following key requirements of money laundering programs and have criminals high transactions behind anonymity of the block chain. -- heidi transactions behind the anonymity of block chain. the bitzlato co-founder is in handcuffs in the united states. agencies around the world have taken strong action to ensure that bitzlato can no longer facilitate crime. none of this would've been possible without strong partnerships on domestic and international levels. between insect, other parts division, u.s. attorneys office and eastern district of new york, and to the stellar teams of fbi agents. between u.s. law enforcement and counterparts in france, between the department and colleagues.

the department also drew heavily today on its deep bench of international experts, including our new cyber operations liaison and cachet in paris. the work announced here is a textbook case for what we can accomplish when we work out -- with our partners here and abroad to disrupt the harm caused by cryptocurrency platforms. we're just getting started. i turn the podium over to my colleague, u.s. attorney briand. -- breanna. >> thank you attorney general. i am a united states attorney for the eastern district of new york. i am honored to speak about the work of the u.s. attorney's

office in the eastern district of new york, and all of our partners. what we have done with respect to investigating and prosecuting. today at my office to unveil charges for operating bitzlato whose stock in trade was it allowed users to open accounts with mental -- minimal identifying -- i've become a safe haven for criminals. including drug dealers and aware groups. they knew when the police traced their funds to bitzlato, they would not turn over its users true identities. the defendant which is bitzlato majority shareholder and sat on top, about these violations. bitzlato they communicated on

the chat system about the proliferation of drug dealers on their exchange, and the way their policy of collecting no identifying information brought on a flood of dirty money. they conducted its business in a brazenly lawless manner that is directly at odds with the rules of honesty and integrity that governs the financial marketplace. to anyone who still believes they can hide from the law by using cryptocurrency, this prosecution should put that pollution to rest. -- illusion to rest. although this was a global crime, this reverberated in the eastern district of new york. bitzlato they do business with individuals, excepted connections from computers in our district and the defendant

would administer his company from the moment he stepped off the plane at jfk airport in queens. my office is at the forefront of crypto -- cryptocurrency prosecutions, angeles continues continues her string of prosecutions in the state where we charged the developer of nft with defrauding his customers in a pool scheme, and left week we charge for individuals in the united states and canada were sending tens of thousands of dollars with the cryptocurrency to aid isis. alongside our partners in law enforcement, where kinetic -- committed to caring out sophisticated and technically demanded prosecutions that match the tempo of the criminals. our partnership with the national currency enforcement team enhances our work in the

space, and we forward to our continued collaboration. finally, i wanted to commend, from my office the u.s. states attorney alexander midland whose detailed and said and assistant united states a current marty mcconnell along with inset scott my slick, and matthew black/white for their excellent work on this case. i would turn the podium over to fbi associate deputy director, brian turner. >> thank you. i am pleased to represent the fbi here today, as a part of this and smidge of the rest of anatoly legkodymov. the arrest that is the culmination of a year of hard work, about our men and women in our office into cross this -- the u.s. and overseas. he is a russian national living in china who was arrested in

miami for the crimes he committed in the u.s. by operating in unlawful cryptocurrency exchange registered in hong kong. he ran -- the dirty money were outside the reach of u.s. government. he and bitzlato were not operating with impunity. even the darknet marketplace which bitzlato similar to a million dollars as the deputy secretary mentioned a moment ago, we shut out lock the dock -- doran hydro last april. both actions were made possible because the fbi strong relationships with our law enforcement partners around the world. over the course of our investigation into bitzlato we found more than $15 million of the ransomware received was laundered through the exchange. making the platform a clear area

for ransomware actors. unfortunately for the defendant, one thing the fbi understands is how to take down criminal organizations. our strategy to combat cybercrime involves going after all key parts of the criminal ecosystem mentioned by the deputy attorney general. the actors, their finances and supporting infrastructure. when you combine this arrest with the french authorities, with bitzlato financial infrastructure, digital infrastructure and actions taken by the treasury department will be spoken about, i said we did that. i can tell you by the folks i'm standing up here with, we are committed to taking a hold of -- a whole government approach to fight signing chill crime -- financial crime and cybercrime. to protect our citizens and national security. let this be a reminder to cyber

criminals, no matter where you are, no matter how much you twist and turn to cover your tracks, there is a risk, and there will be consequences. i would like to introduce deborah d treasury secretary -- deputy treasury for additional remarks. >> let me start by saying that -- thank the deputy attorney general for leadership and the work that is being done at the department of justice and to think the department of justice for being great partners, not just on this action, but going after this ecosystem more broadly. i think in addition, -- thinking our colleagues, i want to thank our colleagues for using the tools congress gave us to go after illicit financial action in russia so quickly and effectively. one of the things those people

in this ecosystem count on, those who are cyber criminals is of a will be able to escape prosecution in the u.s. or other jurisdiction because of coordination. today's action proves that is not the case. working closely with the french we have taken in action that should demonstrate that we will work in a global, consolidated fashion to take action against them, to protect our citizens and global financial system. today part of the u.s. government's action against the virtual currency exchange bitzlato, treasury financial crimes taken steps to expose cyber criminals and enablers. they are identifying bitzlato as a primary money laundering concern in connection with russia's liquid finance. bitzlato the satilla -- facilitated transactions for russian ransomware group. including ones that have connections to the russian

government and russian darknet -- markets. two were scams. bitzlato received virtual currency worth almost half a billion dollars from illicit activity between 2019 and 2021. nearly 50% of all transactions during this time involved russian, illicit finance or risky sources. bitzlato for their active in the satilla -- facilitating illicit activity and is part of a larger ecosystem that is allowed to operate with impunity in russia. it is well known that russia is a haven of cyber criminals where the government lists them for its own malicious purposes. the majority of ransomware 40 defense in 2021, were conducted by russia related cyber somewhere actors. at a time when russia is waging a brutal war in ukraine, and it

seeks to circumvent sanctions and governance controls to philip coppers and sustain itself, we will not tolerate criminal enterprises that enrich russia and his troops. because bitzlato connections to russia, -- align financial sector and business and institutions worldwide. identifying bits lotto's -- bitzlato's international concerns renders it a pariah. while administered by or on behalf of bitzlato. we are prepared to take action against any money laundering,

terrorist financing or illicit finance. we will not hesitate to hold accountable virtual, as it, darknet providers or anyone else, abusing this new authority or any other authority on the treasury department. thank you. >> with that we will take questions. >> thank, two questions, first, legkodymov the russian national that lived in china, was picked up in miami. what have you learned so far about bitzlato's customer

exchange. and is it related to fdx. >> first, we are not aware of legkodymov actions in miami, other than he was picked up there and we will take it from there. then your other question? >> are you seeing any overlap between the bitzlato customer base and the customer base at fdx who is in the news right now. >> i'm not sure if kenneth or the u.s. attorney would like to make additional comments, but we are will not be to do the -- we will not speak to the ongoing investigation regarding ftx, but, today and what's reference by the u.s. attorney, bitzlato was being used by a host of

cyber criminals, used to launder and buy and sell and host the illicit goods. i will see if either of you have anything you want to add. >> just to second the comments from our deputy attorney general, i would mention that he has been charged in a criminal complaint. there is the possibility that additional charges could follow. our investigative efforts continue here and abroad. >> hello, this question for the deputy attorney general. my question, does this have geopolitical significance to the fact that he lived in china and was a russian national, and i'm wondering, whether you would

indicate your special counsel investigation, we were wonder if -- by the midterm cycle. >> i have nothing to add to what was announced last week. on your first question, but i think today's actions show, one, we were working in a coordinated and collaborative fashioning -- fashion with partners here and denied states and broadly -- partners here in the united states and broadly across the globe. those that seek to find safe haven in countries whether they are russia, china, or whether they are places in europe. there is no place that is beyond the reach of u.s. law enforcement and our partners. >> daphne from reuters. >> thank you, so much. did you find any link between bitzlato and russia actors in

ukraine. and -- >> as mike kollek has said -- as my colleague has said, our goal is to ensure that russia cannot use cryptocurrency or other means to circumvent our sanctions. that is part of why we knew authority to go after bitzlato to make sure that they are a national pariah and to make clear those that try to circumvent our sanctions in russia or any other jurisdiction in which we put in place a sanction we will in a collaboration and coordination with our allies and partners and the depend should -- and the department of justice, we will go after you and prosecute group using the tools after -- the

tools in our disposal. >> illicit actors reached an all-time high in 2022 in crypto. to what degree, does this show a national security threat to the u.s. specifically when it comes to crypto and more broadly, to what extent do these transactions should be deemed a threat to general u.s. actions? >> i will start and then turn it over to the deputy secretary. i think what we have shown in these actions, and in the marketplace, those that are seeking to exploit the cryptocurrency markets by ignoring or flouting the regulations are put in place to give consumers and investors confidence in our markets.

to give them confidence in our financial system. we will go after and use whatever tool it takes to find those who are seeking to hide in the shadows and who seek to try and exploit the annan amenity that they -- the anonymity that they think that the block chain provides. we will show that that is not the case. laundering, ransomware attack's, certainly do pose a security concern that's why we will be unrelenting in our efforts and continue to take a coordinated international and global approach to this challenge. wally, is there something you want to add? >> i agree completely with the deputy attorney general. i will say, there are those that will try to use any new technology to try and commit crimes.

here, cyber criminals are attempting to use that technology when it comes to cyber assets. and our message to them and the industry is that we expect them to be followed by other intermediaries and that is an ecosystem or we will not prevent illicit finance to go on. actors that try to seek and evade our sanctions or violate laws or in some pack -- or in some way impacted national security, a tool that we will use in the future when it comes to russia and illicit finance. but we have other tools we are prepared to use as well. our view that traditional currency and the traditional finance, should not be used to transmit illicit finance and we are prepared to act make sure that that is the case. >> this defendant faces a max of five years in prison, the

punishment here doesn't seem to fit the crime. and for the deputy, the white house has been saying that the news of this clack -- of these classified documents, has the justice department and any time since november has -- since november told the justice department that they cannot discuss the facts of these case. >> i will not comment on the announcement of the special counsel or what he said more broadly that we do not talk about our investigations in a public forum. and for your first question i will turn it over to the u.s. attorney. >> short. to be clear, -- sure, to be clear, this is a serious crime that we are taking seriously. the outcome of the case, is premature to anticipate that and it's important to note that the

investigation is ongoing. there could be the assistant attorney general said, additional charges down the line. >> on the subject matter, -- i think that will do it for us today. >> the republicans have said you have been unfair to the former president his is 50 minutes.