Authorities have seized cryptocurrency exchange Bitzlato, and arrested its co-founder, accusing the firm of fuelling a “high-tech axis of crypto crime”.

The US Department of Justice charged Anatoly Legkodymov, a Russian national living in China, with running a business that catered to what he once described as “crooks”.

They said Bitzlato processed more than $700m (£567m) in illicit funds, breaking rules designed to thwart money laundering.

Mr Legkodymov was arrested in Miami.

“Institutions that trade in cryptocurrency are not above the law and their owners are not beyond our reach,” US Attorney Breon Peace said at a press conference on Wednesday, announcing the arrest.

“As alleged, Bitzlato sold itself to criminals as a no-questions-asked cryptocurrency exchange, and reaped hundreds of millions of dollars’ worth of deposits as a result. The defendant is now paying the price for the malign role that his company played in the cryptocurrency ecosystem.”

Since 2018, the Hong Kong-registered exchange had processed about $4.5bn worth of crypto currency transactions, according to the complaint.

The firm required minimal identification from its users, allowing it to become a “haven for criminal proceeds and funds intended for use in criminal activity”, prosecutors said.

They alleged that the firm was aware of the issues, citing an internal document that described Bitzlato as handling “dirty money” without standard customer-vetting procedures.

Authorities said the firm was closely connected to Hydra Market, a darknet marketplace for drugs, money laundering and stolen financial information that international authorities shut down last year.

Bitzlato claimed it did not accept US customers but prosecutors said it in fact did “substantial” business with Americans.

US authorities worked with law enforcement in France and other countries on the operation.