Bitzlato co-founder set to plead guilty to processing $700 million in illicit funds: report

Companies • December 6, 2023, 4:57PM EST

Published 1 minute earlier on

Quick Take

The co-founder of virtual currency exchange Bitzlato was expected to plead guilty in a Brooklyn court on Wednesday, Reuters reported, citing court records.

Anatoly Legkodymov, the Russian co-founder of Hong Kong-registered virtual currency exchange Bitzlato, was expected plead guilty to money laundering crimes in a New York court on Wednesday.

Legkodymov was scheduled to appear in a Brooklyn courtroom before U.S. District Judge Eric Vitaliano at 2:30 p.m. ET for a "criminal cause for pleading," Reuters reported.

Legkodymov was arrested in Miami in January and charged with transmitting illicit funds. Bitzlato had been the largest counterparty of the now defunct Hydra darknet marketplace, whose users sent around $700 million worth of crypto through the exchange, according to the indictment.

Bitzlato also received more than $15 million in ransomware proceeds, the indictment said, alleging that Legkodymov and his team knew the exchange was used by criminals.

Money laundering concern

Along with Legkodymov, former Bitzlato CEO Mikhail Lunev, marketing director Alexander Goncharenko, contractor Pavel Lerner and an unnamed dev-ops engineer were arrested in several European countries, according to a co-founder, who has remained at large in Moscow and even touted plans to re-launch the platform.

Bitzlato was labeled a "primary money laundering concern" by the Department of the Treasury’s Financial Crimes Enforcement Network earlier this year. French authorities seized Bitzlato infrastructure in January.

Disclaimer: The Block is an independent media outlet that delivers news, research, and data. As of November 2023, Foresight Ventures is a majority investor of The Block. Foresight Ventures invests in other companies in the crypto space. Crypto exchange Bitget is an anchor LP for Foresight Ventures. The Block continues to operate independently to deliver objective, impactful, and timely information about the crypto industry. Here are our current financial disclosures.

About Author

Anna is a senior policy reporter and assistant editor at The Block. She has a background in political journalism and covered Russian civil society for a range of news outlets in Moscow, including the award-winning newspaper Novaya Gazeta. Before joining The Block, Anna spent the past five years investigating cryptocurrency policies and adoption around the world at CoinDesk. Anna owns bitcoin and a gift NFT of sentimental value.