Bitzlato Founder Spared Further Jail Time After Guilty Plea for $700M in Illicit Transactions
Anatoly Legkodymov, the Russian founder of Hong Kong-registered crypto exchange Bitzlato, has been spared further jail time after his exchange processed over $700 million in illicit proceeds from the Russian dark web.
Despite the severity of the charges, the court deemed Legkodymov’s time served sufficient, marking a significant chapter in the crackdown on illegal cryptocurrency activities.
On July 18, 2024, in a New York District Court, Judge Eric Vitaliano sentenced Legkodymov to time served, acknowledging the harsh conditions at Brooklyn’s Metropolitan Detention Centre (MDC), where he had already spent 18 months.
“It’s a terrible place and the court does consider that,” Vitaliano remarked, referencing two recent detainee murders as a reason against imposing further prison time.
It all began with the arrest of Legkodymov on January 17, 2023 , in Miami, following a coordinated international effort involving the United States, Spain, Portugal, Cyprus, and the European Union Agency for Law Enforcement Cooperation (Europol).
The operation led to the shutdown of Bitzlato on January 23, 2023. According to the U.S. Department of Justice (DOJ), Bitzlato has processed approximately $4.58 billion in cryptocurrency transactions since May 2018, with a substantial portion linked to criminal activities.
The DOJ accused Legkodymov of running the exchange as an unregistered money-transmitting business that facilitated the transfer of illicit funds, largely due to its lax anti-money laundering (AML) measures and lack of Know Your Customer (KYC) requirements.
Bitzlato had a notorious relationship with Hydra Market, a Russian dark web marketplace that was shut down in April 2022. Before its closure, Hydra accounted for 80% of
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