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Bitzlato Suspends Bitcoin Withdrawals Amid Court Proceedings Over Confiscated Funds

Crypto exchange Bitzlato has temporarily suspended Bitcoin withdrawals amid pending court hearings in France over confiscated user assets.

Key Details

• Bitzlato has temporarily halted Bitcoin withdrawals as well as special balance withdrawals and technical customer support. The suspension is a precautionary measure due to legal proceedings in France.

• The company expressed optimism that the current issue will be resolved soon.

• Users were allowed partial Bitcoin withdrawal access on March 20 and could withdraw up to 60% of funds starting September 14.
• Bitzlato operations were halted after the arrest of founder Anatoly Legkodymov in Miami on January 18. justice.gov

Background

Bitzlato is accused of processing over $700 million in illicit funds, including proceeds from ransomware attacks and transactions for Hydra Market, a darknet marketplace. The exchange reportedly had lax identity verification requirements, sometimes allowing users to provide false information during registrations.

Founder Anatoly Legkodymov pleaded guilty to operating a service that transmitted illegal funds. He agreed to close Bitzlato and forfeit around $23 million in seized assets. Legkodymov has also petitioned to be released from custody following his plea deal.

The French Prosecutor’s Office has investigated Bitzlato. Europol reported the exchange laundered approximately €1 billion ($1.08 billion) from Hydra Market and ransomware operations. Law enforcement confiscated Bitzlato’s hot wallet containing around 35% of user funds across all cryptocurrencies.

Sources: telegram channel, Cryptonews

Stay tuned for further updates as the story develops.

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