Bitzlato Suspends Bitcoin Withdrawals Indefinitely Amid Legal Problems
Bitzlato, a crypto exchange platform, has indefinitely suspended the withdrawal of Bitcoins (BTC) from its platform due to legal issues in France. The suspension of special balance withdrawals and technical customer support is a temporary measure taken by the administration in preparation for upcoming court hearings related to the seized assets of users in France.
Partial Bitcoin Withdrawals Allowed
While the withdrawal of Bitcoins has been suspended, users of the web version and Bitzlato app can still make partial withdrawals from March 20 onwards. Additionally, the platform increased the funds limit to 60% from September 14.
Founder’s Arrest and Plea Deal
The suspension of operations came after the arrest of Bitzlato’s founder, Anatoly Legkodymov, in Miami on January 18. Legkodymov pleaded guilty to transferring and laundering criminal funds and agreed to close the platform. As part of the plea deal, he also waived any claims for approximately $23 million related to the seized assets of the exchange.
French Investigation and Seized Funds
The French Prosecutor’s Office initiated an investigation into Bitzlato following reports that the platform converted criminal-related assets amounting to €1 billion ($1.08 billion). These assets included $700 million for the darknet marketplace Hydra and $15 million for ransomware operators. During the operation, law enforcement officers seized Bitzlato’s hot wallet, which held about 35% of user funds across all cryptocurrencies at that time.
Hot Take: Bitzlato Faces Legal Challenges with Bitcoin Withdrawals
Bitzlato’s indefinite suspension of Bitcoin withdrawals raises concerns about its legal problems in France. With the withdrawal of special balances and technical customer support temporarily halted, users may face difficulties accessing their funds. The platform’s founder, Anatoly Legkodymov, has already been arrested and pleaded guilty to criminal activities. The investigation by the French Prosecutor’s Office further adds to the uncertainty surrounding Bitzlato. As the legal proceedings continue, it remains to be seen how this situation will impact Bitzlato’s future and its users’ assets.
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