The founder of Bitzlato, a Hong Kong-registered crypto exchange reportedly handling more than $700 million in illicit funds, was arrested in Miami on Tuesday night, part of a sweeping international effort to crack down on darknet markets.

Send the news: The Ministry of Justice announced the charges against Anatoly Legkodymov, a Russian citizen, at a press conference on Wednesday. The French authorities and the US Treasury Department’s Financial Crimes Enforcement Network (FinCEN) are undertaking simultaneous enforcement actions.

Why it matters: US investigators and regulators are cracking down on crypto, but the DOJ’s latest action shows how authorities in various jurisdictions are working together to corner bad actors and enforce US sanctions.

• Darknet marketplaces facilitate the buying and selling of illegal drugs, stolen financial information, identification documents and mixing services.

What they say: Criminals who think they can hide behind crypto — “this prosecutor should break that illusion,” Breon Peace, the U.S. Attorney for the Eastern District of New York, said at a news conference Wednesday.

Details: Legkodymov, 40, lives in Shenzhen, People’s Republic of China, is a senior executive and majority shareholder of Bitzlato.

• His arrest is the result of more than a year of investigation.

Zoom in: A complaint unsealed Wednesday morning alleges that Legkodymov knowingly facilitated illegal activities.

• The founder allegedly used Bitzlato’s internal chat to write to a colleague that the platform’s users were “known as crooks,” according to the DOJ press statement.
• Legkodymov’s arrest is related to the now-shutdown darknet marketplace Hydra Market, Bitzlato’s largest counterparty in crypto transactions, the DOJ said.

flashback: US and German authorities shut down Hydra in April and the DOJ seized money from a Russian oligarch.

The other side: The industry has braced for the coming deluge of enforcement action, as implied by the growth of the Securities and Exchange Commission unit focused on crypto assets announced in May.

• Meanwhile, since 2017, the SEC has been getting more help from the DOJ, FBI and U.S. law firms, according to data collected by Cornerstone Research.

The big picture: The investigation is “ongoing” and more charges could be filed at a later date, Peace said.