In 2017 Exmo crypto CEO Pavel Lerner was kidnapped in Kiev, in 2023 he was arrested in Spain for links to Bitzlato crypto exchange.

“We are going to sue Chainalysis for defamation”, a middle-aged man in a Balenciaga t-shirt is saying. His name is Anton Shkrurenko, and he is one of the Bitzlato crypto shareholders.

His partner, Anatoly Legkodymov, was arrested in Miami on the 17th of January and now faces five years in prison for illegal money transmitting. Last year Chainanalysis put Bitzlato in the top-7 of Moscow crypto exchanges that have facilitated the most money laundering. The application for Legkodymov’s arrest warrant contains excerpts from Bizltato administrative chat. These excerpts show that Legkodymov and Shkurenko were aware that their service was far from any KYC policy standards and most of its clients were from Hydra which had been the main dark web marketplace for drugs, guns and documents until 2022.

Nevertheless, Shkurenko in his first interview after Legkodymov’s arrest denied the accusation of money laundering. He escaped the arrest and revealed who else was prosecuted in Europe within the Europol operation called “Cryptostorm”.

Pavel Lerner

The most notable Bitzlato senior management team caught in the “Cryptostorm” was 45 years old Pavel Lerner. He is a Russian national, and in the middle of 2010-s he worked as a CEO of EXMO crypto exchange with main office in Kyiv.

In the end of 2017, he was kidnapped while coming to this office. Witnesses reported that he was dragged into a black Mercedes-Benz by men wearing balaclavas. Later he found himself in a basement of some unknown building. The kidnappers demanded 2500-3500 bitcoins to be paid, which was about 70 mln dollars at that time, remembered Lerner later. They might think that he had access to EXMO crypto wallets, but in it seemed that he didn’t, so in the end he transferred them his own bitcoins worth about $1 mln.

The kidnappers threw him away from the car on the road, remembered Lerner in one of his interviews. They were so “kind” that they left him some currency, so he reached the nearest petrol station and called the police.

There was another version of what happened too. Some people in the crypto community said that Lerner might know who sent the kidnappers, and that Lerner supposedly owed money to these people. Once Lerner was asked about this version in one crypto chat, but instead of answer he left it.

Two years later he headed the Ukrainian crypto exchange Utorg. It is not clear if he works there yet (UPD. Later the company informed me that he left it in the end of 2019). But for some time he was involved in the Bitzlato project of stablecoin pledged to the Russian ruble (Monolith), one of Bitzlato owners Shkurenko confirmed in his interview.

“I knew that they were linked to each other, but I didn’t know how exactly”, a Russian crypto entrepreneur told me.

Lerner and his family used to live in Barcelona. Three individuals were arrested in Spain within the the “Cryptostorm” operation, Europol informed. They were Bitzlato CEO, Financial director and Marketing director. I will write about CEO and Marketing director in the next chapter, but for now it seems that Lerner was the Bitzlato Financial director — at least, Europol has some evidence of it.

Michail Lunev

Ex Bitzlato CEO Michail Lunev was arrested too, Shkurenko mentioned in his interview. I hinted that it could have happened in my previous story about Bitzlato.

26 years old Ukrainian Michail Lunev first worked in the company as a coder, then he was appointed as a team lead and in the end headed the service. He used to come to the Russian office of Bitzlato from time to time, and he never hid his links to the service, commenting on corporate news for crypto media.

Lunev was not the only Ukrainian in the team. When the full-scale Russian-Ukrainian war started this year, the service officially announced that the CEO would leave the project taking part of the team with himself. There were no details why it happened, except for a diplomatic phrase “considering the current situation”. But the war divided not only companies, but even families, so no wonder that the Ukrainian part of the team did not want to have anything in common with former Russian partners anymore.

Besides Lunev, ex Chief Marketing officer Alexander Goncharenko was arrested, Shkurenko mentioned in his interview. Goncharenko worked at Bitzlato since 2019 and left in February, 2022, he wrote on his LinkedIn page.

Shkruneko’s words match with Europol information that Bitzlato CEO and Marketing director were arrested in Spain. And although Lunev and Goncharenko were ex senior management staff, it did not prevent them from the arrest.

35% of crypto is seized

The US and EU law enforcement seized 35% of all cryptocurrency from Biztlato wallets, Shkurenko said. It is estimated that the crypto exchange platform has received a total of assets worth €2,1 billion, the Europol calculated previously.

But Shkurenko is going to restore the service, complaing that its problems are a part of the “war against Russia”. Such a position is not surprising.

Anatoly Legkodymov and another Bitzlato co-owner, Sergey Shakhnov, were interested in activities of the Russian pro-Kremlin and freaky “The National Liberation Movement” (NOD). The NOD members believe that Russia is a US colony, and the sovereignty should be restored. One of the ways to do it is a preventive nuclear attack on Washington. The movement members even organised a rally “To Washington” in the centre of Moscow at the end of 2022.

And paradoxically Legkodymov was operating Bitzlato from Miami at that time.