# The US Government is saying: Don’t mess with me! 

**Published by:** [Durwin](https://paragraph.com/@durwin/)
**Published on:** 2023-02-20
**URL:** https://paragraph.com/@durwin/the-us-government-is-saying-don-t-mess-with-me

## Content

Is the U.S government sending a message or a warning to everyone in cryptoland?Lets play a game shall we? Read the following headlines and tell me what doesn’t fit in. Jamie Dimon got paid $34.5M in 2022 as the CEO of JPMorgan. Reed Hastings stepped down as Netflix’s CEO. US reached its $31.4T debt ceiling. New Zealand PM Jacinda Ardern resigned abruptly. FTX’s new CEO said the crypto exchange could restart. Bitzlato was seized by the US government. One of these does not fit in at all. Bitzlato. Ever hear of it? I have been in crypto for years and I never heard of it. Could it be a snazzy new cafe that serve mocha latte and accepts Bitcoin? Nah it is way weirder.I bet you $100, you ain’t heard of Bizalato before.A random crypto exchange got entangled with the US government for allegedly allowing criminals to launder crypto and now they wanna shut it down. “The U.S. Department of Justice arrested and charged Russian national Anatoly Legkodymov, the founder of the Hong Kong-registered cryptocurrency exchange Bitzlato, with helping cybercriminals allegedly launder illegally obtained money.” As usual Crypto Twitter went wild. “Prominent Celsius credit Tiffany Wong sarcastically tweeted that she had all of her money on Bitzlato” BTC expert Zack Voell tweeted, “They missed FTX/They missed 3AC/They missed Celsius/They missed BlockFi/They missed Voyager/But at least they got Bitzlato,”. Crypto lawyer Hailey Lennon tweeted, “I’ve worked in the space since 2013. Never heard of it.” Hands up, shaking my head.Crypto Twitter went bananas because even the degens didn’t know what is Bizlato.Basically with no KYC implemented, they are going to jail. Without KYC, they essentially permitted anyone, criminal masterminds and school students alike, to launder and funnel cryptocurrencies unfettered, unchecked and unseen. KYC is when an exchange verifies and ascertains your real identity and ensure you are not a shady criminal and you are who you say you are. That is before they let you use their services. So without KYC, naturally criminals and hackers who stolen crypto, would be able to easily deposit their ill-gotten tokens into the exchange and trade it for other currencies.This proved to be just the beginning as the SEC cracks down hard on all the bad actors in cryptoland.Admittedly, it is a huge problem. To put things in perspective, according to a Chainalysis report on cryptocurrency-based money laundering activity, Bitzlato received more than 2 billion worth of crypto between 2019 and 2021, over $966 million representing illicit and risky cryptocurrency (amounting to roughly 48% of the total). Today, the DOJ said that because of “deficient know-your-customer (KYC) procedures, Bitzlato allegedly became a haven for criminal proceeds and funds intended for use in criminal activity.” “Chainalysis added that, according to its estimations, the crypto exchange “received $206 million from darknet markets, $224.5 million from scams, and $9 million from ransomware attackers.”” For that, U.S. Department of Justice arrested the founder, slammed the brakes on the exchange and literally wiped it off the face of the internet in one fell swoop. The US Gov ain’t playing around.Is more or less government intervention needed for crypto?When they started investigating criminal activities and looking seriously into crypto last year, they really meant it. Why? Well, the crypto market has gotten so large so quickly, that it would foolish to ignore its growth and adoption any more. As crypto gets more mainstream, more retail investors pile in and more criminals enter the ecosystem to prey on the gullible. Therefore, more policing and justice are needed. Is it a vicious cycle? Yes, absolutely. But I believe it is necessary. For any ecosystem, there needs to be escalation on either side, till an equilibrium is reached naturally. Not sure why Bitzlato was the chosen one, but it will sure send a strong message down everyone’s spine and alert the entire crypto community. And so it begins. - You ever heard of Bizlato? - #startups #business #startupx #growth #success #socialmedia #culture #entrepreneurship #strategy #eth #btc #crypto #bitzlato #scams #laundering #NFT #usgovernment #meme #hydramarket #defi

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