Bitzlato Halts Withdrawals in Preparation for Court Proceedings
Hong Kong-based cryptocurrency exchange Bitzlato has temporarily suspended withdrawals as it prepares for court proceedings related to the confiscation of user assets in France. In a message sent to users via Telegram, the Bitzlato team expressed optimism about the outcome of the court case.
Bitzlato’s Co-Founder Pleads Guilty to Money Laundering Charges
A few weeks prior to the withdrawal suspension, Bitzlato’s co-founder, Anatoly Legkodymov, pleaded guilty to money laundering charges in New York and agreed to shut down the exchange. The arrest was part of a joint operation between the U.S. Department of Justice, Treasury Department, and European law enforcement agencies.
Legkodymov was held responsible for facilitating the transmission of over $700 million in illicit funds through Bitzlato, which had minimal requirements for user identification. The exchange also served as a major platform for darknet market participants and ransomware criminals.
Partial Access Granted, Uncertainty Remains
After Bitzlato’s operations were shut down and its assets frozen, the team allowed users partial access to their holdings in March. Altcoin holdings were converted to bitcoin (BTC), and customers could withdraw up to 50% of their funds using a Telegram bot. However, it is currently unclear when users will be able to fully access their balances.
“At the moment, we are faced with the need to suspend special balance withdrawals and technical support. This is a temporary measure to prepare for and go through the upcoming court hearings regarding the seizure of user assets in France. We are determined and optimistic about this issue,” stated the Bitzlato team.
A Mixed Year for Bitzlato
Despite the challenges, the Bitzlato team reflected on 2023 as a “not so bad” year. The exchange was able to close 70% of its balance when U.S. authorities halted its services.
Hot Take: Bitzlato Prepares for Legal Battle Over User Assets
Hong Kong-based cryptocurrency exchange Bitzlato has temporarily suspended withdrawals in anticipation of court proceedings related to the confiscation of user assets in France. The exchange’s co-founder pleaded guilty to money laundering charges and agreed to shut down the platform. While partial access to holdings was granted earlier this year, it remains uncertain when customers will be able to fully access their funds. Despite the challenges, Bitzlato closed a significant portion of its balance and remains optimistic about the outcome of the court case.
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