Bitzlato founder pleads guilty, agrees to dissolve dark web exchange 

The DOJ announced charges against the founder of the Hong Kong-based exchange in January

article-image

Artwork by Crystal Le

share

Anatoly Legkodymov, founder of the dark web-tied crypto exchange Bitzlato, has pleaded guilty to operating an unlicensed money transmitting business in a New York court. 

The Department of Justice originally filed charges against the Hong Kong-based exchange’s majority owner last January. 

Bitzlato “sold itself to criminals as a no-questions-asked cryptocurrency exchange, and reaped hundreds of millions of dollars worth of deposits as a result,” US attorney Breon Peace said in a statement at the time.

According to the DOJ, Legkodymov will dissolve Bitzlato and “release any claim over approximately $23 million in seized assets of Bitzlato” as part of the plea agreement. A sentencing date has not been set yet.

Read more: Bitzlato may make crypto scoff, but law enforcement thinks otherwise

“We are dismantling and disrupting the cryptocrime ecosystem using all tools available — including criminal prosecution. In January, the Department and our partners took down Bitzlato’s infrastructure and seized its cryptocurrency. Today’s conviction of Bitzlato’s founder is the latest product of our efforts,” Deputy Attorney General Lisa Monaco said in a press release.

The DOJ and German authorities shut down Hydra Market — which allegedly specialized in being a marketplace for drugs and stolen financial information — back in 2022. The online marketplace exchanged roughly $700 million worth of crypto with Bitzlato, the authorities said.  

Legkodymov was denied bail at a hearing back in March due to his status as a Russian national in the US on a visa and his “access” to crypto, cited as reasons to keep him detained.

The initial DOJ announcement surprised some in crypto, with some taking to X to post that they had never heard of the exchange before.  


Get the news in your inbox. Explore Blockworks newsletters:

Tags

Upcoming Events

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

Industry City | Brooklyn, NY

TUES - THURS, JUNE 24 - 26, 2025

Permissionless IV serves as the definitive gathering for crypto’s technical founders, developers, and builders to come together and create the future.If you’re ready to shape the future of crypto, Permissionless IV is where it happens.

Brooklyn, NY

SUN - MON, JUN. 22 - 23, 2025

Blockworks and Cracked Labs are teaming up for the third installment of the Permissionless Hackathon, happening June 22–23, 2025 in Brooklyn, NY. This is a 36-hour IRL builder sprint where developers, designers, and creatives ship real projects solving real problems across […]

recent research

Research Report Templates.png

Research

The convergence of DePIN and energy generation aims to address modern grid challenges by incentivizing distributed generation.

article-image

The deal is likely to fuel further M&A around derivatives trading and infrastructure, Architect Partners’ Michael Klena says

article-image

Stripe announced Stablecoin Financial Accounts, which will allow businesses to have “stablecoin-powered accounts”

article-image

The deal is made up of $700 million in cash and 11 million shares of Coinbase’s Class A common stock

article-image

Blockworks Research uses numbers to help crypto advance to a higher stage of storytelling

article-image

While Arizona’s governor could veto another crypto reserve bill, similar North Carolina and Texas laws are approaching the finish line