The creator of the defunct exchange Bitzlato avoids more jail time despite his platform handling over $700 million in illegal revenue from the Russian dark web.
According to the judge, Anatoly Legkodymoc had served eighteen months in Brooklyn’s “terrible” MDC, which was sufficient punishment.
According to reports, the creator of the now-defunct cryptocurrency exchange Bitzlato was spared additional time in prison after his platform handled over $700 million in illegal revenue from the Russian dark web.
According to reports, Anatoly Legkodymoc was sentenced to time served by Judge Eric Vitaliano in a New York District Court on July 18, following his guilty plea to a single charge of running an unauthorized money-transmitting firm.
Legkodymov had already spent 18 months in Brooklyn’s Metropolitan Detention Centre (MDC), according to Judge Vitaliano, and it was more than enough time to punish him for his offenses.
Vitaliano stated, “The court does consider that. It’s a terrible place.”
Before his fraud trial, FTX founder Sam Bankman-Fried also served time in the MDC. He was convicted guilty of all seven fraud counts and given a 25-year jail sentence.
Moreover, Legkodymov consented to give up any claim to the $23 million in cryptocurrency assets French law enforcement had taken during the international sting operation, resulting in the exchange’s closure on January 23, 2023.
The prosecution said that Legkodymov failed to put in place sufficient safeguards to keep an eye on who was using the exchange and assisted in the trade of more than $700 million in cryptocurrencies through the Russian dark web black market Hydra Market.
Additionally, the prosecution claimed that Bitzlato customers routinely acknowledged trading under fraudulent identities when they contacted the exchange’s customer support page to ask for assistance with transactions on Hydra Market.
They also cited Legkodymov’s message to a Bitzlato colleague in May 2019, claiming that many of the exchange’s users were “known to be crooks.”
Legkodymov told the court in a statement that he had been thinking back on his conduct with Bitzlato for the previous eighteen months.
“As the company’s founder, I now realize I could have done more,” he remarked.
On January 17, 2023, Legkodymov was taken into custody in Miami due to a concerted international campaign to close the exchange.
The sting operation that resulted in Legkodymov’s arrest and the removal of the exchange involved the participation of the United States, Spain, Portugal, Cyprus, and the European Union Agency for Law Enforcement Cooperation (Europol).
According to a report by Europol, around 46% of the assets processed by Bitzlato, which was worth $1.09 billion at the time, had connections to illegal activity.
Europol stated that most suspicious transactions were connected to organizations sanctioned by the Office of Foreign Assets Control (OFAC). In contrast, other transactions were linked to ransomware, money laundering, cyber scams, and child abuse materials.
