The Russian founder of Bitzlato was sentenced to time served for facilitating over $700 million in illegal crypto transactions.

Anatoly Legkodymov, a Russian co-founder of Hong Kong-based crypto exchange Bitzlato that processed over $700 million worth of illicit crypto on the dark web, was sentenced to 18 months but won’t serve additional time, as he’s already spent that period in custody for operating an unlicensed money-transmitting business.

On July 18, Judge Eric Vitaliano in a New York District Court sentenced Anatoly Legkodymov after he pleaded guilty in December 2023 to facilitating transactions tied to the dark web, including the notorious Hydra Market, which was shut down in 2022.

While prosecutors from the office of Brooklyn U.S. Attorney Breon Peace argued that Legkodymov deserved at least four years in prison for “creating a clearinghouse for dirty money,” the judge factored in the harsh conditions of the Metropolitan Detention Center, where Legkodymov had been held, calling it “a terrible place,” and referencing two recent detainee murders as a reason against more prison time.

The U.S. Department of Justice claimed Bitzlato was a primary provider for dark market purchasers and sellers, as well as a “safe haven for ransomware criminals.” Under the plea agreement, Legkodymov dissolved Bitzlato and released claims of over $23 million in seized assets of the crypto exchange.

Bitzlato is believed to have been connected to Hydra Market, an online illicit narcotic marketplace that prosecutors say was linked to criminal activities such as money laundering, drug trafficking, sales of illegally acquired financial information, and fraudulent identities.

The U.S. Treasury’s FinCEN revealed that Bitzlato’s transactions were heavily linked to Binance, a cryptocurrency exchange whose founder Changpeng Zhao stepped down in late November 2023 as part of a $4.3 billion settlement agreement with U.S. regulators. Later on, Zhao was sentenced to four months in prison after pleading guilty to violating U.S. laws.