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Bitzlato Announces Withdrawal Suspension in Wake of Asset Seizure

Xavier Jackson

ByXavier Jackson

Dec 28, 2023

Bitzlato, a cryptocurrency exchange with links to Russia, has recently announced a temporary suspension of specific withdrawal requests, effective from December 27. This decision comes despite the platform’s claim of partially recovering its funds, following a seizure of its assets by French authorities in January. 

The exchange continues to grapple with the repercussions of this legal action, alongside allegations of money laundering, leading to the halting of withdrawal services for its users.

Bitzlato Confronts Withdrawal Challenges Amid Asset Seizure

In a recent development, Bitzlato, a cryptocurrency exchange with ties to Russia, announced on December 27 the temporary suspension of select withdrawal requests. This move comes in the wake of asset seizures by French authorities earlier in the year. 

In a message shared on Telegram, the company indicated that this suspension, which includes “special balance withdrawals” and technical support, is a precautionary step ahead of upcoming court hearings related to the seized user assets in France.

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However, Bitzlato has not provided clarity on what exactly constitutes “special balance withdrawals.” Additionally, there is no information on whether this withdrawal suspension is exclusive to France or extends to other regions. 

This lack of specificity has left users with unanswered questions regarding the accessibility of their funds and the broader implications of these legal challenges for the exchange.

Bitzlato Operations Halted Since January Seizure

Since January, Bitzlato has been facing operational challenges after its assets and infrastructure were seized by French authorities, along with cooperation from international law enforcement agencies including those from the U.S. Currently, the company’s website is inactive, displaying only a message from the authorities involved in the seizure.

Despite these setbacks, Bitzlato recently stated that it has managed to close 70% of the balance it held at the time its services were suspended. This development is particularly notable given the ongoing freeze on its assets. 

However, the company has not provided further details on how it plans to fulfill its obligations under these constrained circumstances. This situation leaves several questions unanswered regarding Bitzlato’s future operations and its ability to navigate through these legal and financial challenges.

Bitzlato Under Scrutiny by U.S. Treasury and Department of Justice

The U.S. Treasury has raised significant concerns about Bitzlato, identifying it as a platform involved in money laundering activities tied to illegal Russian financing. Consequently, transactions with the exchange have been prohibited. 

In a separate move, the U.S. Department of Justice has underscored Bitzlato’s involvement in money laundering and other criminal activities. The exchange is alleged to have laundered approximately $700 million in connection with Hydra Market, a now-defunct Russian darknet market.

The legal troubles for Bitzlato extend to its leadership as well. On December 6, Anatoly Legkodymov, the founder of Bitzlato, entered a guilty plea in the U.S. and agreed to forfeit $23 million to prosecutors. While he has yet to receive his sentence, Legkodymov faces a potential prison term of up to five years. 

Additionally, in January 2023, European authorities arrested several senior management figures associated with Bitzlato. These developments highlight the intensified global regulatory and legal scrutiny facing Bitzlato and its executives, marking a significant period of challenge for the cryptocurrency exchange.

Xavier Jackson

Xavier Jackson

Xavier Jackson is a talented and versatile news writer with a knack for delivering compelling stories. With a dedication to accurate reporting and a captivating writing style, his articles provide readers with insightful and thought-provoking perspectives on current events.

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