Bitzlato Founder Released After Time Served for Crypto Crimes

The founder of the shut down crypto exchange Bitzlato has been released after serving 18 months in jail.

Bitzlato was implicated in processing over $700 million linked to the Russian dark web. On July 18, New York District Court Judge Eric Vitaliano ruled that Anatoly Legkodymov’s time in Brooklyn’s Metropolitan Detention Centre was sufficient punishment after he admitted to running an unlicensed money-transmitting business.

Judge Vitaliano noted the harsh conditions of the MDC, where other high-profile detainees, including FTX founder Sam Bankman-Fried, have also been held.

Legkodymov will not contest the seizure of $23 million in crypto assets by French authorities during the global takedown of Bitzlato in January 2023.

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The prosecution argued that Bitzlato facilitated over $700 million in cryptocurrency transactions on Hydra Market, a Russian dark web marketplace, without proper oversight.

Evidence included customer service interactions where users admitted to using false identities for transactions. In a 2019 message, Legkodymov acknowledged that many users were likely involved in criminal activities.

In his court statement, Legkodymov expressed regret, stating, “I realize now as the founder of the company, I could have done more.”