Anatoly Legkodymov, the Russian founder of the Bitzlato cryptocurrency exchange, was sentenced to the 18 months he had already served in US federal custody, Bloomberg reported.
The sentence was handed down by US District Judge Eric Vitaliano in Brooklyn, New York. Legkodymov was found guilty of operating an unlicensed money-transmitting business that facilitated illegal gambling and drug offers well worth over $700 million.
In Custody Since Jan 2023
Legkodymov had been in custody since his arrest in January 2023. He pleaded guilty in December 2023, admitting that Bitzlato was used to process transactions linked to dark web activities, including the notorious Hydra Market, which was shut down by authorities in 2022.
Prosecutors, led by Brooklyn US Attorney Breon Peace, argued for a minimum of four years in prison. They accused Legkodymov of creating a “clearinghouse for dirty money” and allowing Bitzlato to become a hub for criminals, drug dealers, and ransomware extortionists despite multiple warnings.
During the sentencing hearing, Judge Vitaliano described the Metropolitan Detention Center, where Legkodymov has been held, as “a terrible place,” influencing his selection to keep away from additional jail time. The facility has faced extreme incidents, including the latest murders of detainees.
The judge acknowledged Legkodymov’s awareness of the illicit nature of his operations and his role in processing hundreds of millions of dollars in illegal funds. However, he also recognized Legkodymov as “an entrepreneur and a visionary” with a previously admirable life.
Rising Criminal Activities in the Crypto Space
Legkodymov, who had lived in Russia and Shenzhen, had moved to Pennsylvania before his arrest. As part of his plea agreement, he waived any claim to a million in cryptocurrency seized by French authorities.
This case is part of a broader US Justice Department initiative to combat the wrong use of cryptocurrency and recover illicit funds through the National Cryptocurrency Enforcement Team. Last year, Binance Holdings Ltd. Its CEO, Changpeng Zhao, reached a settlement with America for anti-money laundering and sanctions violations, permitting Binance to keep operating. Judge Vitaliano noted that Zhao received only four months of incarceration for his guilty plea, providing context for Legkodymov’s sentence.
Also read: US Court Agrees to enter into a protective order in the United States vs Changpeng Zhao case