Bitzlato suspends bitcoin withdrawals from the platform

On December 27, the Bitzlato crypto-exchange announced the suspension of withdrawals from a special balance and customer support services. 

The administration described this as “a temporary measure” to prepare for upcoming court hearings concerning frozen user assets in France. 

“We are full of resolve and optimism regarding this matter,” the statement says. 

Access to partial bitcoin withdrawals for Bitzlato’s web version and app users receivedsince March 20. Since September 14, the platform increased the limit to 60%.

The French public prosecutor’s office initiated an investigation into the company in January. According to Europol, in total Bitzlato converted assets tied to criminal activity totaling about €1 billion ($1.08 billion). The amount includes $700 million for the Hydra darknet marketplace and $15 million for ransomware operators.

Law enforcement seized the platform’s hot wallet, which held “around 35% of users’ funds across all cryptocurrencies at the time of the operation”.

As a reminder, Bitzlato suspended operations on January 18, the day after the arrest of its founder Anatoly Legkodymov in Miami. Subsequently, he pleaded guilty to transferring and laundering criminal proceeds. In addition, the entrepreneur agreed to close the platform and renounce any claims to about $23 million tied to the seized assets of the exchange.

Under the deal with investigators, Legkodymov filed a petition for release from custody.

It was also reported the arrest of former chief executive Mikhail Lunev, marketing manager Alexander Goncharenko, the Monolithos DAO implementation contractor Pavel Lerner, and the platform’s system administrator.

As ForkLog lawyers stated, all arrested individuals “were not part of the team, but were either contractors or consultants; some of them never participated in the company’s core activities”.