The Bitzlato cryptocurrency exchange platform plans to resume operations and immediately allow users to withdraw bitcoins. This was stated by Bitzlato co-founder Anton Shkurenko in an interview with the YouTube channel Satoshkin.
According to Shkurenko, as part of an investigation initiated by the French prosecutors, law enforcement authorities “seized” the platform’s hot wallet, which held “about 35% of users’ funds across all cryptocurrencies at the time of the operation”.
He did not name the exact amount, citing fluctuations in exchange rates. He also disputed the €1 billion figure mentioned in a media report.
“The company never had money in such an amount, especially in hot wallets. We took a very responsible approach to safeguarding users’ funds, and such an amount could not be seized,” said Shkurenko.
He also disclosed the names of four Bitzlato employees detained in the case, in addition to its founder Anatoly Legkodymov. They are:
- former chief executive Mikhail Lunev;
- marketing manager Alexander Goncharenko;
- contractor for the Monolithos DAO realization Pavel Lerner;
- system administrator Konstantin.
The latter has, according to Shkurenko, already been released on bail and is under a travel ban in Cyprus.
Despite the ongoing investigation, Bitzlato has decided to resume operations. No concrete timeline was given.
“The only thing I can state with 100 percent certainty at this stage is: 50% of user funds in Bitcoin stored on Bitzlato wallets will be withdrawable on the same day we launch. For other cryptocurrencies, the launch will be gradual,” he said.
At present, Bitzlato is auditing losses and plans to move the company to the Russian jurisdiction.
“Europol was in a great hurry because they knew we would relocate to Russia. We will relocate with wallets and absolutely everything; they will have nothing, literally,” added Shkurenko.
The company is now seeking a data-centre contractor to host its equipment. The co-founder noted that “the service will be launched in the form in which it was shut down on January 18”.
“We recognise that we made some mistakes. On the shut-down service we will be able to fix them very quickly, because on a running service this was quite difficult to do. And we will secure users’ funds in every possible way, because it would simply be useless [for law enforcement],” said Shkurenko.
In January, the U.S. Department of Justice arrested the founder of Bitzlato Anatoly Legkodymov on charges of laundering $700 million tied to Hydra.
On January 18, the platform team stated that there had been a hack and withdrawal of part of the funds. A few hours later they announced the suspension of service.
According to Europol, Bitzlato converted assets linked to criminal activity totaling around €1 billion ($1.08 billion). Transactions were conducted in Bitcoin, Dash, Litecoin, as well as dollars and Russian rubles.
The main receiving counterparties of Bitzlato are named the cryptocurrency exchange Binance, the darknet marketplace Hydra, and the financial pyramid “Finiko.” In particular, according to reports, Binance processed bitcoin transactions for the exchange totaling almost $346 million.