The U.S. Justice Department and Treasury Department have charged Bitzlato Ltd. with money laundering and arrested its founder in Miami, officials said at a press conference in Washington on Wednesday.

Bitzlato, a Hong Kong-based platform, has been effectively shut down, and founder Anatoly Legkodymov was taken into U.S. custody, moves that will stop Bitzlato from catering to criminals tied to Russia, Deputy Attorney General Lisa Monaco said at the press conference. She outlined the coordinated enforcement actions, which also included the Federal Bureau of Investigation, French authorities and the U.S. Treasury Department, saying they disrupted "a busy corner of this criminal ecosystem."

The Treasury's Financial Crimes Enforcement Network (FinCEN) formally labeled the company a lprimary money-laundering concern,r which is among the most serious sanctions in the governmentrs criminal-fighting arsenal because it usually cuts off a business off from the global financial system.

The label effectively declares the exchange "an international pariah," Treasury Deputy Secretary Wally Adeyemo said.

Legkodymov is a Russian citizen and majority owner of Bitzlato who was living in China. After his arrest, he was scheduled to be arraigned on Wednesday in the U.S. District Court for the Southern District of Florida.

The little-known cryptocurrency exchange offered peer-to-peer services and hosted wallets of criminals buying and selling illegal goods, according to Justice Department officials, involving $700 million in direct and indirect transfers in the last several years. FinCEN said the company played a key role in handling illicit transactions for ransomware actors in Russia, including those connected to the Russian government.

The crackdown against Bitzlato was the most significant U.S. action against a crypto criminal network to date, Monaco said.

The company, whose servers have been seized, was also tied to routine transactions with the Russian-based Hydra Market, a darknet market targeted by U.S. authorities last year. Monaco said the "Hydra-Bitzlato crypto-crime axis" is now shut down.

Nikhilesh De contributed reporting.

UPDATE (Jan. 18, 2023, 17:44 UTC): Adds more details about the accusations and sanctions.

UPDATE (Jan. 18, 2023, 17:55 UTC): Adds comments from Justice Department.

UPDATE (Jan. 18, 2023, 18:07 UTC): Adds ties to Hydra Market.