Can a Crypto Founder Be Punished Twice for the Same Crime? The Anatoly Legkodymov Extradition Case

That question defines the legal battle of Anatoly Legkodymov, whose 18-month detention at one of America's most notorious facilities was supposed to be the end of his story. Instead, it may be just the beginning.

\ Legkodymov was arrested in January 2023 during a Miami family vacation. His daughter watched FBI agents take her father in handcuffs. He spent 18 months at the Metropolitan Detention Center in Brooklyn, a facility notorious for inhumane conditions including lack of heat and inadequate medical care. He pleaded guilty to operating an unlicensed money transmission business. The federal judge determined his detention was adequate punishment. Case closed. Except France filed charges months later for the same conduct, potentially exposing him to 20 years in prison.

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The Platform and The Charges

Bitzlato operated as a peer-to-peer cryptocurrency exchange serving Eastern Europe and Russia. Unlike centralized exchanges that hold customer funds, peer-to-peer platforms facilitate direct user transactions. The platform deliberately blocked US users and implemented know-your-customer (KYC) and anti-money laundering (AML) procedures, according to court filings.

\ The Department of Justice alleged Bitzlato processed over $700 million and became a haven for darknet marketplace Hydra proceeds. Prosecutors claimed the platform marketed to criminals with inadequate compliance. Defense evidence showed compliance improvement efforts, external AML firm hiring, and problematic user exclusion. The platform charged minimal fees for years. Legkodymov never met anyone from Hydra and had no direct knowledge of their activities.

\ He pleaded guilty under 18 U.S.C. § 1960, which criminalizes money transmission without proper licensing. Critics note this statute could apply to numerous fintech platforms if enforced consistently. PayPal and Venmo process countless transactions later connected to crime, yet their executives face no charges. Legkodymov was not charged with knowingly facilitating specific crimes, just compliance failures while some users allegedly engaged in criminal activity elsewhere.

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The Immunity Betrayal

During US detention, French authorities requested Legkodymov's cooperation investigating Bitzlato within French jurisdiction. They offered immunity from prosecution in exchange for testimony. Legkodymov spent three days providing detailed information with legal counsel present. The immunity arrangement was explicitly acknowledged during proceedings.

\ After Legkodymov completed his sentence, France filed criminal charges. Same facts. Same conduct. Up to 20 years under French law. This immunity violation threatens international legal cooperation frameworks. Immunity agreements exist because both sides benefit: prosecutors gain testimony, witnesses gain protection. When one side violates this bargain, the system collapses.

\ Legal experts note immunity agreements should be honored except in extraordinary circumstances involving new evidence of distinctly separate conduct. Using immunized testimony against the witness violates basic due process. If suspects cannot trust these assurances, they will refuse cooperation in cross-border investigations, harming law enforcement's ability to investigate complex international financial crimes.

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The Double Punishment Problem

Does extraditing Legkodymov constitute double punishment? While France is a separate sovereign, the facts remain identical. The Fifth Amendment's double jeopardy principle prohibits prosecuting someone twice for the same offense within one sovereign. The dual sovereignty doctrine permits separate prosecutions by different governments, but extradition law contains discretionary elements. The US is not obligated to extradite simply because France filed charges.

\ A federal judge weighed culpability, harm, deterrence, and proportionality, concluding Legkodymov's punishment was sufficient. France seeking 20 additional years nullifies that judicial determination. He has lost nearly two years with his daughter, his business, and his assets. To face decades more creates existential uncertainty that itself constitutes punishment.

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The Policy Shift That Left Him Behind

The Biden administration pursued aggressive crypto enforcement, treating platforms with heightened suspicion and pursuing criminal charges for compliance failures that might receive civil penalties in traditional finance. Critics called this Operation Chokepoint 2.0. Legkodymov's arrest occurred at peak enforcement.

\ The Trump administration reversed course. Beyond establishing a cryptocurrency strategic reserve, President Trump pardoned Changpeng Zhao, Binance founder, in January 2025. Zhao pleaded guilty to anti-money laundering violations involving far more extensive compliance failures.

\ The comparison is stark. DOJ alleged Binance processed billions for sanctioned jurisdictions including Iran and North Korea, failed to implement basic KYC for years, and actively facilitated sanctions evasion. Binance's transaction volume dwarfed Bitzlato's. Yet Zhao received four months and a pardon. Bitzlato was smaller, blocked US users, and implemented compliance measures. Legkodymov was never alleged to have knowingly processed sanctioned transactions. He spent 18 months in detention, received no pardon, and now faces extradition for potential decades. The only explanation: timing.

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The Banking Double Standard

The inconsistency deepens compared to traditional banks. In 2012, HSBC paid $1.9 billion settling charges it laundered billions for Mexican drug cartels. No executives went to prison. In 2014, BNP Paribas paid $8.9 billion for processing transactions for Sudan and Iran. No executives faced criminal charges.

\ These cases involved knowing violations, massive transaction volumes, and direct sanctioned activity facilitation. Penalties were purely financial. Institutions continued operating. Executives kept positions and freedom. Different treatment of crypto platforms versus banks suggests enforcement is not about conduct but about industry. If operating a platform criminals use makes you liable, every bank CEO should face charges. This selective enforcement undermines prosecution legitimacy.

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What This Means for International Law

The immunity violation threatens cross-border criminal investigation frameworks. International law relies on mutual assistance treaties and cooperation protocols functioning through good faith. Defense attorneys in future cases will cite Legkodymov as reason clients should not cooperate with foreign authorities. The damage extends beyond this case to international criminal law architecture.

\ French prosecution also raises extraterritorial jurisdiction questions. Bitzlato blocked French users and operated primarily in Eastern Europe and Russia. If any country can prosecute online platform operators based on indirect territorial connections, founders face potential liability in hundreds of jurisdictions. This creates impossible compliance burdens and makes operating global internet services a legal minefield where prosecution depends on which country decides to assert jurisdiction.

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Final Thoughts

Three arguments support denying extradition. Legally, the immunity violation undermines French prosecution legitimacy. When authorities promise immunity for testimony, then use that testimony to prosecute, they violate basic due process. International legal cooperation cannot function if immunity agreements are suggestions rather than binding commitments.

\ Emotionally, Legkodymov is a father arrested in front of his daughter who spent 18 months in notorious detention. He cooperated at every stage and served his sentence. To tell him his ordeal is not over inflicts continued trauma. Justice requires not just punishment but resolution.

\ Pragmatically, the US shifted from aggressive crypto enforcement. The Trump administration pardoned other crypto founders and signaled past enforcement was excessive. Facilitating Legkodymov's extradition contradicts this policy shift and perpetuates an approach the government acknowledged was misguided.

\ The Zhao comparison is unavoidable. Zhao oversaw far more serious compliance failures at vastly larger scale. He received four months and a pardon. Legkodymov operated a smaller platform with better compliance. He spent 18 months and faces extradition for decades. This disparity is explained only by arbitrary timing and selective enforcement.

\ French prosecution serves no legitimate purpose not already accomplished. Legkodymov has been punished, lost his business and assets, and accepted responsibility. Continuing to pursue him does not protect anyone or serve recognizable justice goals. It is punishment extended indefinitely without regard for proportionality.

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\ For Anatoly Legkodymov, the answer appears to be never, unless the US rejects France's extradition request and allows a man who served his sentence to go home. That would not just be mercy. It would be justice.

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:::tip This author is an independent contributor publishing via our business blogging program. HackerNoon has reviewed the report for quality, but the claims herein belong to the author. #DYO

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