Judge Sentences Bitzlato Crypto Exchange Founder Anatoly Legkodymov to Time Served

On Thursday, July 18, 2024, U.S. District Court Judge Eric Vitaliano of the Eastern District of New York sentenced Russian cryptocurrency exchange founder Anatoly Legkodymov to time served.

Legkodymov was the founder of Bitzlato, a cryptocurrency exchange registered in Hong Kong. He had been detained at the Metropolitan Detention Center for over 18 months following his arrest on charges of operating an unlicensed money-transmitting business that facilitated illegal activity.

Federal prosecutors had sought a sentence of 48 months in prison, while sentencing guidelines placed Legkodymov in the range of 70–87 months. However, Judge Vitaliano determined that Legkodymov had already served time within this range during his pre-trial detention. The judge pointed to alternative sentencing guidelines from the American Bar Association in making his decision.

Prosecutors alleged that Bitzlato processed over $700 million in illicit proceeds and served as a conduit for illegal purchases on the dark web, including drugs, stolen financial information, and money laundering. However, Vitaliano acknowledged that Legkodymov had been “an entrepreneur and a visionary” but had also likely “put on very thick blinders” regarding certain illegal aspects of his business.

Legkodymov’s defense attorney stressed the poor conditions his client faced during his detention at the Metropolitan Detention Center. Within days of being detained, another inmate had threatened Legkodymov’s life. The attorney argued Legkodymov did not deserve any further jail time given the circumstances of his pre-trial detention.

As part of the plea agreement, Legkodymov forfeited $23 million in assets that are now in the custody of the French government. However, he will remain in immigration custody as his visa expired during his detention. With time served, Judge Vitaliano sentenced Legkodymov to two years probation, acknowledging the ongoing problems with conditions at the Metropolitan Detention Center.

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