Japan weighs probe into prime minister-themed ‘Sanae Token’

Bitzlato co-founder to pleads guilty in US to illicit funds processingAnatoly Legkodymov, the co-founder and majority owner of Hong Kong-registered virtual currency exchange Bitzlato, entered a guilty plea in a U.S. court on Wednesday in relation to illicit funds transfer activity.Photo by Max Sandelin on UnsplashNew York court appearanceAccording to a Department of Justice press release, Legkodymov, a Russian national, appeared before U.S. District Judge Eric Vitaliano for a “criminal cause for pleading,” signaling a guilty plea.Legkodymov, 41, was arrested in Miami on Jan. 17 and has been held at the Metropolitan Detention Center (MDC) in Brooklyn since then. U.S. authorities accused him of processing approximately $700 million in illicit funds through Bitzlato, a platform headquartered in Hong Kong.The charges related to operating the platform as an unlicensed money exchange business. Allegedly, he engaged in significant cryptocurrency swaps with Hydra Market, described as a marketplace involved in drugs, stolen financial information and money laundering services.United States Attorney for the Eastern District of New York, Breon Peace stated:“Legkodymov’s guilty plea today confirms that he was well aware that Bitzlato, his cryptocurrency exchange, was being used like an open turnstile by criminals eager to take advantage of his lax controls over illicit money transactions.”The Department of Justice maintained that Bitzlato becoming “a haven for criminal proceeds and funds intended for use in criminal activity” was as a result of its “deficient know-your-customer (KYC) procedures.”Website taken downBitzlato’s website has been replaced by a notice stating that the service was seized by French authorities as part of an international law enforcement action coordinated with U.S. and German law enforcement shutting down Hydra Market in April 2022.This guilty plea is the latest development in U.S. law enforcement’s broader efforts to crack down on fraud and illicit financial activities within the cryptocurrency markets. In recent cases, FTX founder Sam Bankman-Fried was convicted for stealing billions from customers, while Binance agreed to a $4.3 billion settlement, with CEO Changpeng Zhao (CZ) pleading guilty to violating U.S. anti-money laundering laws. Binance was identified as one of Bitzlato’s top counterparties by U.S. authorities.Russia calls for Legkodymov’s releaseDespite calls from Russia’s embassy in Washington for Legkodymov’s release and an embassy visit to him in jail, the U.S. State Department confirmed that Russia rejected a proposal for the release of two Americans, including Wall Street Journal reporter Evan Gershkovich. This follows Russia’s denial of a U.S. embassy request to visit Gershkovich. The diplomatic exchanges underscore the international dimension of the case and the geopolitical tensions surrounding the detention of individuals in both countries.As U.S. law enforcement continues its efforts to combat cryptocurrency-related crimes, the anticipated guilty plea of Bitzlato’s co-founder highlights the regulatory scrutiny and consequences faced by those involved in illicit financial activities within the crypto industry.

Korean Metaverse Platforms Face Uncertain Future Amidst Mounting ChallengesSeveral Korean metaverse platforms, which had promised to usher in a new world bridging online and offline experiences, have found themselves in premature jeopardy, according to industry observations. Various companies that had earmarked metaverse platforms as their future growth driver failed to establish an effective revenue structure to bring this to fruition, leading to speculation that there are limits to successfully developing this branch of business.Photo by GuerrillaBuzz on UnsplashDwindling popularityMetaverse platforms first garnered significant attention during the COVID-19 pandemic, but interest has waned since then — in Google Trends, the keyword “metaverse” has been showing a clear decline since reaching its peak in November of 2021.The actual usage rates of such platforms have also been low. According to the Korea Information Society Development Institute, last year’s usage rate was a mere 4.2%, and some local government-funded platforms had only about 200 daily visitors despite considerable budget sizes.As a result, companies struggling with financial difficulties have opted to downsize their operations, strategizing for mid- to long-term approaches to improving efficiency until an era of metaverse popularization arrives.Roadblocks for small and large companies alikeAccording to industry sources on Friday, platforms like Cytown, developed by social networking space Cyworld, have shut down after just a year, while Kakao Games’ collaborative metaverse venture Colorverse and Com2us Group’s Com2Verse have entered into restructuring phases.Com2verse’s decision comes just two months after the official release of its all-in-one metaverse platform. The company plans to provide three months’ salary to those applying for voluntary resignation and prioritize hiring new faces when expanding the workforce in the future. The scale of voluntary resignation has not been disclosed.The restructuring process will affect all employees except those involved in core functions such as development and services. Employees opting for voluntary resignation will also have the option to transfer to other subsidiaries under Com2us Group.Founded in April of last year, Com2Verse recorded an operating loss of KRW 8.3 billion (approximately $6.2 million) in the first half of this year. Its parent company, Com2us, also recorded consecutive deficits, starting with an operating loss of KRW 19.4 billion in last year’s fourth quarter, followed by losses of KRW 14.8 billion and KRW 5.6 billion in this year’s first and second quarters, respectively. Despite maintaining a stable revenue in its game business, the company faced challenges due to the poor performance of its subsidiary companies and the mounting labor costs needed for accelerating new business endeavors.Com2us has thus determined that it would be difficult to boost revenue and improve cost structure in the short term. Hence, the company chose to restructure its organization while retaining key personnel working under the Convention Center, an event platform on Com2Verse, which is expected to drive the business forward.Com2us emphasized that its commitment to the metaverse market remains unchanged, stating, “Given the current situation of local and international metaverse industries, we believe that significant time and investment will always be necessary. Therefore, we have decided that choosing our priorities and focusing on them is the best way to respond to long-term market changes.”Similarly, Kakao Entertainment had signed a memorandum of understanding (MOU) last year with Neptune, a game developer in which Kakao Games owns a 35% share, and Colorverse, a metaverse company in which Neptune owns a 44% share, to jointly work on an open three-dimensional metaverse platform also called Colorverse. However, Colorverse has also undergone restructuring since earlier this year to reduce its workforce after it posted an operating loss of KRW 11.5 billion last year.Industry analysts have attributed Colorverse’s business slump to the departure of Namkoong Whon, the former CEO who had pinned his hopes on a metaverse as one of the conglomerate’s promising enterprises.Korean game developer NCSOFT had also said that it is building its own metaverse platform dubbed “Miniverse,” which allows various types of online gatherings from community meetups and study groups to remote classes and work. The company had even conducted a welcome presentation for new employees through Miniverse, but news regarding the project has been scant since then.As these major corporations have been struggling to overcome such hurdles, smaller startups have undoubtedly been facing increasingly dire circumstances as well, with some even resorting to unexpected suspensions of service operations without prior notice. Others have promoted themselves as metaverse platforms and issued virtual assets that can be used within the virtual world, but in many cases, these assets have proven to be of little benefit or use.“A revenue structure that can generate income from metaverse platforms has not yet been established. With the gradual decline in remote education, meetings, and telecommuting after the easing of the pandemic, the value of metaverse platforms has also decreased. Also, factors like increased information technology (IT) labor costs and the overall state of the global economy are influencing business momentum,” an industry insider commented.

Mosca, a cash-to-crypto exchange headquartered at the Moscow International Business Center, was subject to a raid carried out by the Russian authorities on April 23. The raid occurred in the immediate aftermath of a call from a member of the commission of the Public Chamber (OP) of the Russian Federation to ban crypto exchanges from facilitating the purchase of cryptocurrencies using cash.Photo by Egor Filin on UnsplashInvestigating fraudWhile attending the Blockchain Life 2025 event in Moscow, Mosca’s Head of Development, Dmitry Titarenko, confirmed to Cointelegraph that the rationale provided for the raid was that it was in connection with fraud perpetrated by one of its platform users. Titarenko added: “Law enforcement agencies have carried out a standard procedure of checking our customer data.” The raid occurred during the company’s attendance at the Blockchain Life conference. Mosca was a key conference participant, having established two stands at the event and winning an award for the best crypto exchange service. Reporting on the raid, local media outlet Baza said that it had been carried out in relation to fraud perpetrated against the former head of the Samara Region Development Corporation, Olga Serova. It explained that Serova had been conned into handing over 350 million rubles ($4.24 million) and $800,000 to the scammers.  Seven arrestsShe withdrew these funds from her bank at the end of last year, despite bank officials having tried to persuade her against the withdrawal for this purpose. The news outlet added that to date, seven people have been arrested in connection with the alleged fraud. The Mosca exchange service may be proving to be attractive to scammers as the platform allows users to buy up to 100,000 USDT per day using cash. Titarenko couldn’t confirm that the raid was carried out in connection with the Serova fraud case. He said that “maybe it was [in relation to] another client.”The exchange executive also confirmed that the company had been in the process of putting in place more resources to carry out anti-money laundering (AML) and know-your-customer (KYC) checks, together with a blacklisting system related to suspicious platform users. Cash-to-crypto ban proposalThe raid occurred within 24 hours of Yevgeny Masharov, a member of the commission of the Public Chamber (OP) of the Russian Federation, putting forward a proposal to ban crypto exchanges from receiving cash, making services like Mosca’s cash-to-crypto exchange illegal. According to state-owned Russian news agency TASS, Masharov said that such a move would “cause a large-scale blow to scammers, because it’s no secret that telephone scammers use crypto exchangers to withdraw cash.”Sergey Mendeleev, a well-known figure within crypto circles in Russia, told attendees at the Blockchain Life conference that such a cash-to-crypto ban would be an unwelcome development for the sector. If such a ban were to materialize, Mendeleev suggested that it would be an indication that the Russian authorities were turning away from the greater development of cryptocurrency in Russia. Last week, it emerged that Russia’s Ministry of Finance, in collaboration with the country’s central bank, plans to launch a crypto exchange for qualified investors. The central bank also confirmed plans to launch a digital ruble payment network in 2026.