Legkodymov was tried and sentenced in the United States for money laundering and brokering illegal crypto transactions. This incident once again brought to the fore the challenges facing the cryptocurrency market and the need for regulation.

Anatoly Legkodymov was one of the founders of the cryptocurrency exchange Bitzlato. Bitzlato’s name came up in connection with the illegal online marketplace Hydra Market, which was closed in 2022. Hydra Market was known for criminal activities such as drug dealing, money laundering, and selling fake IDs. US authorities claimed that a significant portion of Bitzlato’s transactions were linked to such illegal activities and that the platform had become a “safe haven for dark web criminals”.

Investigations revealed that over $700 million in illegal cryptocurrency transactions were carried out through Bitzlato. These transactions were investigated on suspicion of being used to finance crimes such as money laundering and drug trafficking. The US Department of Justice accused Legkodymov of mediating these illegal transactions.

Legkodymov pleaded guilty in December 2023. As part of the guilty plea agreement, Bitzlato terminated its platform and gave up its rights to the crypto exchange’s seized assets. The value of these assets was approximately 23 million dollars.

New York District Court Judge Eric Vitaliano sentenced Legkodymov to 18 months in prison. However, Legkodymov will not serve any additional prison time as he is already in custody for operating an unlicensed money transfer service. This situation sparked public debate. Some argued that responsibility for the $700 million illegal transaction should be met with a harsher penalty.

In its decision, the court also took into account the difficult conditions of the prison where Legkodymov was detained and the deaths that occurred there. However, this decision also brought criticism that cryptocurrency crimes were not punished sufficiently as a deterrent.

The Bitzlato scandal once again reveals the challenges facing the cryptocurrency market. Lack of regulation and inadequate measures against money laundering can pave the way for such illegal activities.

On the other hand, the incident also brought up Binance, another cryptocurrency exchange linked to Bitzlato. US authorities also alleged that Binance founder Changpeng Zhao turned a blind eye to money laundering activities.

As a result of these allegations, Zhao left office at the end of 2023 and reached a $4.3 billion agreement with the United States. He was later convicted of violating US law and sentenced to four months in prison.

The Bitzlato scandal could be an important turning point for the reliability and future of the cryptocurrency market. This incident will fuel discussions about tightening regulations and greater control of cryptocurrency exchanges.

In order for the cryptocurrency market to develop in a healthy way, criminal elements must be eliminated and an environment of trust must be established. Otherwise, the fact that cryptocurrencies continue to be associated with illegal activities will continue to be one of the biggest obstacles to the potential of this technology.