Co-founder of the Bitzlato exchange arrested in Moscow at the request of France for laundering millions

In mid-January, the owner of the Bitzlato crypto exchange was arrested in Miami. Anatoly Legkodymov. This Krasnodar programmer created a financial center with a turnover of $5 billion and, together with partners, controlled 1% of the entire Bitcoin network. Legkodymov knew that he was helping to legalize money for not the most law-abiding people, and therefore, in recent years, he lived with his family in China, a very tolerant place for such a business.

After the closure of the darknet site for the sale of drugs Hydra, with which Bitzlato worked, and it was time to lay low. But instead, Legkodymov went to the United States, the country that had the most claims against him. And he didn’t even take the minimal precautions of installing a VPN while continuing to operate Bitzlato from his Miami apartment.

As Baza found out, Legkodymov transferred his share in Bitzlato to his partner a year ago and resigned from the post of general director of the exchange. But an attempt to protect himself by legally exiting the business did not save him from arrest. Why did he go to the USA, knowing that he was facing a huge sentence, who now owns Bitzlato and why Legkodymov smiled during his arrest – read in our investigation.

Huaqiangbei, the largest electronics market in the world, is also located here. On it, you can buy all the parts to assemble a smartphone yourself, or 100,000 smartphones to open your own production line. Legkodymov began to collect not smartphones, but mining farms and ASICs. A mining farm is usually called a ready-made assembly of combined video cards and a computing system that allows you to mine cryptocurrencies. Asics (ASICs) are special high-performance processors created for the mining of a specific digital currency.

Shenzhen is located in the south of China, linking the mainland with the Hong Kong Special Administrative Region. It was in Hong Kong that Legkodymov registered a company for the assembly of equipment for mining LGK Power Limited in 2015, becoming its sole owner, follows from the register of legal entities in Hong Kong. Later, Legkodymov was joined by his friend Anton Shkurenko, who became the owner of a 14% stake in LGK Power. Friends gave one percent to another fellow countryman – Sergei Shakhnov.

LGK’s sales and earnings are unknown: the Hong Kong registry does not share revenue information. But, as Baza found out, the farms assembled in Shenzhen were delivered to Russia. They are leased and sold by Russian legal entities controlled by Shkurenko and Legkodymov, for example, A-XVT. In 2017-2021, she earned 245 million rubles.

Since 2015, partners have been building their own mines – pools assembled from hundreds of small farms for the extraction of cryptocurrency. It looks like this: one mini-farm consists of 8 powerful video cards and occupies one “shelf” on a server rack. In total, the rack accommodates about 10 farms.

One of the first data centers for mining all types of cryptocurrencies was built by Legkodymov’s team in Irkutsk, in an abandoned factory workshop. In total, the LGK group opened five data centers in three countries: three in Russia, one in Abkhazia and one in China. Their total capacity was 4.5 MW.

Renting a server rack in Russia in 2017 cost about 30 thousand rubles per year. Based on the number of racks, the income of the Irkutsk center alone could amount to 2.43 million rubles a year, the Abkhazian center – 5 million. This is a full-fledged passive income: ASICs do not ask for porridge and can stand unattended for months, fire safety is controlled by an alarm, voltage is automatic , and a separate fee was charged for server maintenance.

By the way, while Legkodymov lived in China, he regularly flew to Russia on business. Since 2020, his Moscow address in the documents of the Hong Kong registry appears in a rather modest apartment with an area of ​​​​about 40 square meters. m in one of the towers of the residential complex “Savelovsky City” and cost about 14 million rubles.

According to Chainalysis, from 2019 to 2021, the Legkodymov exchange passed $2 billion through itself, of which $430 million was illegal funds obtained as a result of criminal activity. In the list of anti-money launderers from City, which was compiled by American analysts, Bitzlato was in second place in terms of turnover.

The Moscow office of Bitzlato was located on the 24th floor of the Federation East Tower and, as reported by the Dossier Center in December 2022, accepted only those clients who were ready to bring in cash from $100,000 or the ruble equivalent.

A month after the release of Chainalysis materials, as Baza found out, Sergey Shakhnov became the sole owner of the company. The partners transferred (or sold) their shares to him. Also, the corporate registry of Hong Kong registered a record that Legkodymov Anatoli is leaving the post of director of the Hong Kong company Bitzlato Limited, and Maksim Breev, a native of Maykop, becomes the new director instead of him.

Before the 43-year-old Breev headed the Hong Kong company, he managed to work at the post office, in the Wimm-Bill-Dann warehouse, where he packed more than one hundred boxes of juice, and established himself as a business partner of Shkurenko. Together they founded the Planet-South construction company in Maykop.

Literally a month before Breev headed the multibillion-dollar crypto-exchange, bailiffs brought enforcement proceedings against him for a ridiculous amount for his future status – 86 thousand rubles. And three years earlier, Breev owed creditors 481 thousand rubles. This indicates that Breev turned out to be an accidental, if not nominal, head of the crypto exchange.

Perhaps Legkodymov, having read about himself in the Chainalysis study, decided to lay low. He could be afraid of imposing sanctions on his exchange. The “special military operation” had just begun then, and the funds of many Russians were blocked in foreign jurisdictions. The funds and accounts of Russian citizens were also frozen by the largest exchanges: Coinbase, CEX IO, etc.

After leaving the company, the partners did not completely lose control over the business: according to the FBI, they continued to administer the exchange and manage it until Legkodymov was arrested. It cannot be ruled out that they simply agreed with Shakhnov that he would hold an asset for them during this difficult time.

After giving up the shares, Shkurenko went to Turkey to buy a yacht for himself and receive a captain’s certificate. Himself wrote about his plans in the community of Russian-speaking yachtsmen in Turkey, entry dated October 29, 2022, in the midst of mobilization. In the same autumn, the plane with Legkodymov on board landed in New York.

The FBI has been following Gandalf for a long time. By US Deputy Attorney General Lisa Monaco, the investigation against Legkodymov lasted a year. And he certainly felt at least the interest of the FBI in his person.

At the same time, from China, which does not have an extradition treaty with the United States, for some reason Legkodymov went to Miami – directly into the “paws” of the FBI.

When an American border guard officer asked him to unlock his phone to check the contents, Legkodymov calmly showed chats in instant messengers called the “Bitzlato admin panel”. And managed the exchange from Miami for three months even without a VPN. Maybe the crypto wizard realized that he was under a hood, decided that the life of a person hiding from justice and changing personalities and countries did not suit him, and voluntarily made a deal with the investigation?

This version is supported by a rather mild article, which Legkodymov is accused of. The FBI accuses him not of laundering criminal funds (as some Russian media wrote), but of “managing a money transfer business that is not registered in the United States and is associated with non-compliance with anti-money laundering laws.” Investigators are sure that Legkodymov knew about the illegal origin of the funds, but deliberately continued operations and turned a blind eye to mandatory KYC procedures like verifying the user’s passport. Since some of the clients entered the exchange through American IP addresses, from the point of view of the FBI, the business was conducted in the United States, which means that the Legkodymov crypto exchange should have been registered. Now he faces up to 5 years in prison. In the case of a deal, the Russian Gandalf may completely avoid the deadline.

Lawyers consider the version of the crypto-broker’s deal to be quite logical. “In America, the system of deals with the investigation is well developed,” says lawyer Kirill Belsky. – The exorbitant prison sentences imposed in the United States are well compensated by the favorable conditions that the accused can negotiate for himself by making a deal. Such transactions are always preceded by long negotiations. Perhaps the arrival of Legkodymov in the United States is the result of such negotiations.

However, as the lawyer noted, everything can be the other way around: it happens that a person is lured into the country through trusted channels, promising to remove all claims if he gives evidence, but in the end he is detained and subjected to criminal prosecution.

According to Kirill Belsky, in the United States, in a deal with the investigation, the accused can bargain for himself quite a lot: for example, the complete abolition of imprisonment, that is, he will be punished with a fine or a suspended sentence.

“It all depends on what you are willing to give to the authorities,” Belsky said. – Any deal with the investigation is a full-fledged deal. Instead, it is usually required to disclose accomplices in criminal activity. The American authorities, as a rule, are very interested in PEP accomplices (Politically exposed person, politically exposed person. – Approx. Bases), those who are involved in the laundering of funds received from the sale of drugs, etc.”

The risk of a deal with the investigation is revenge on the part of those whom a person has handed over, which may overtake sometime in the future. Whether Legkodymov will take this risky step will show the course of the trial. The other day Gandalf was transported to New York. There will be a main hearing in the case. “Baza” learned that the court of the Eastern District of New York will consider, among other things, the issue of releasing Legkodymov on bail.

In the picture taken during the arrest, Legkodymov’s face did not express any fear or fear of the future at all. He looks calm and even smiles slightly for the camera.

Legkodymov’s lawyer, Joel Defabio, did not respond to Base’s questions sent to his email. Business partner Gandalf Shkurenko also did not comment on anything.