Bitzlato Temporarily Suspends Bitcoin Withdrawals Amid Legal Proceedings Over Seized Assets
Summary:
Bitzlato, a cryptocurrency exchange, has temporarily halted all Bitcoin withdrawals ahead of upcoming legal proceedings in relation to seized user assets in France. The move comes just weeks after co-founder Anatoly Legkodymov agreed to disband the exchange and forfeit $23 million in crypto assets as part of a guilty plea for running an unlicensed business. Legkodymov was arrested earlier this year during a joint operation led by U.S. and French law enforcement agencies, who accused the exchange of being used by criminals to launder funds.
Merely weeks following the agreement by Bitzlato's co-founder to disband the cryptocurrency exchange as part of a guilty plea in a Brooklyn court, the Bitzlato team declared a "temporary halt" to all Bitcoin transactions. On December 27, they used their Telegram Channel to communicate this as a provisional action, as they ready themselves for upcoming courtroom proceedings pertaining to their customers' confiscated assets in France. "We are faced with a sense of resoluteness and anticipation concerning this issue," stated the firm. Yet, on December 6, former CEO of Bitzlato, Anatoly Legkodymov, consented to discontinue Bitzlato and relinquish $23 million in crypto linked to his guilty plea for running an unauthorized money services business. The founder was apprehended in Miami in January of this year, during a joint operations crackdown led by the United States' Department of Justice, the Treasury Department, and French law enforcement. The operation successfully beset much of the company's infrastructure, including the seizure of its website. The introduction users receive when attempting to access Bitzlato's site portrays this. Despite the exchange and its property being confiscated, Bitzlato successfully facilitated partial access to customer funds in March, allowing users to reclaim 50% of their stranded assets through a Telegram bot. Over the subsequent months, they incrementally increased the proportion of users' assets available for withdrawal, reaching 70% in November. United States Attorney Breon Peace slammed the crypto exchange, accusing it of functioning as an "unrestricted passageway for criminals," while the Department of Justice believes it served as an "essential financial conduit" for the Hydra darknet marketplace, enabling users to launder ill-gotten gains, ransomware attack proceeds included. Related: Anticipating the Crypto personalities who might be behind bars in 2024? Magazine: Top 10 comprehensive crypto reads of 2023.
Published At
12/28/2023 3:31:42 AM
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