Bitzlato will temporarily suspend withdrawals weeks after its founders agreed to dissolve the exchange.
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The Bitzlato team declared that all Bitcoin withdrawals must be “temporarily suspended” just weeks after the company’s co-founder agreed to break up the cryptocurrency exchange.
The company said this is only a temporary solution while it prepares and moves forward with court proceedings for seized user funds.
The Bitzlato team declared that all Bitcoin withdrawals must be “temporarily suspended” just weeks after the company’s co-founder agreed to break up the cryptocurrency exchange in exchange for a guilty plea in a Brooklyn court.
The company said in a post on its Telegram channel on December 27 that this is only a temporary solution while it prepares and proceeds with court proceedings over seized user funds in France.
Bitzlato Telegram message English translation: Google
However, on December 6, Bitzlato’s former CEO Anatoly Legkodymov pleaded guilty to charges of running an illegal money services company in exchange for Bitzlato being dissolved and $23 million in cryptocurrency forfeited.
As part of a joint operation by the US Department of Justice (DoJ), the US Treasury and French law enforcement, the founder was detained in Miami in January this year. The operation resulted in the seizure of a significant portion of the company’s website and infrastructure.
Last March, Bitzlato allowed users to use a Telegram bot to withdraw 50% of their remaining assets on the platform, despite the exchange and its assets being seized. This indicates that the user’s access to their funds has been partially restored.
Bitzlato website as of December 28, 2023
In the months that followed, the company continued to increase the maximum withdrawal amount consumers could withdraw, reaching 70% in November.
The Justice Department alleged that cryptocurrency exchanges were a vital source of funding for Hydra’s darknet markets and allowed users to launder funds, including money obtained through ransomware attacks. U.S. Attorney Breon Peace accused the exchange of being a vehicle used by criminals. Open the turnstile.
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