(Bloomberg) -- The Russian founder of the Bitzlato cryptocurrency exchange was sentenced to the 18 months he’d already served behind bars in the US for operating an unlicensed money-transmitting business that masked the proceeds of illegal gambling and drug deals valued at more than $700 million.

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Anatoly Legkodymov, who had been in federal custody since his January 2023 arrest, was sentenced to time served Thursday by US District Judge Eric Vitaliano in Brooklyn, New York. Legkodymov, who pleaded guilty in December, admitted knowing for years that Bitzlato was being used as a conduit for transactions tied to the dark web, including the notorious drug bazaar Hydra Market, which was shut down by authorities in 2022.

Prosecutors in the office of Brooklyn US Attorney Breon Peace argued Legkodymov, who owned and controlled Bitzlato, deserved at least four years in prison for “creating a clearinghouse for dirty money.” He continued to allow the exchange to operate even after being repeatedly warned it had become “a haven for criminals, drug dealers, ransomware extortionists” on the dark web.

But at the sentencing hearing, the judge called the Metropolitan Detention Center where Legkodymov has been held “a terrible place,” which factored into the decision against more time behind bars. In the last five weeks, there have been two murders of detainees at the lockup.

Vitaliano acknowledged Legkodymov “was aware of the illicit nature of what he was doing” and processed hundreds of millions of dollars in illicit funds for criminals. But the judge also called him “an entrepreneur and a visionary” who Vitaliano said had “led a life to be admired” prior to his arrest.

Ledkodymov, who had lived Russia and Shenzhen had moved to Pennsylvania at the time of his arrest. As part of his plea, he also agreed to waived a claim to $23 million in cryptocurrency seized by French authorities.

The case was part of a broader effort by the US Justice Department to fight the criminal use of crypto and recover the proceeds of those crimes through the National Cryptocurrency Enforcement Team. Last year, Binance Holdings Ltd. and Chief Executive Officer Changpeng Zhao pleaded guilty to anti-money laundering and US sanctions violations under a sweeping settlement with the US that allows the cryptocurrency exchange to continue operating.

Vitaliano, in explaining his sentencing of Ledkodymov, said Zhao only got four months of incarceration for his guilty plea.

The case is US v. Legkodymov, 23-cr-496, US District Court, Eastern District of New York (Brooklyn).

(Updates with comments from judge in the fifth paragraph.)

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