Table of Contents
Bitzlato Exchange Freezes withdrawals, a Hong Kong-based cryptocurrency exchange, has temporarily suspended withdrawals as it faces upcoming court proceedings related to the confiscation of user assets in France. This decision follows the recent guilty plea of Bitzlato’s co-founder, Anatoly Legkodymov, in connection with money laundering charges.
Despite the temporary withdrawal suspension and technical support interruption, the Bitzlato team remains optimistic about the outcome of the court case, as conveyed in a message to users via Telegram.
Bitzlato Exchange Freezes Withdrawals Faces Consequences Following Co-founder’s Guilty Plea and Exchange Closure
Bitzlato Exchange Freezes Withdrawals, a Hong Kong-based cryptocurrency exchange, has implemented a temporary withdrawal suspension following its co-founder Anatoly Legkodymov’s recent guilty plea to money laundering charges in New York. Concurrently, Legkodymov agreed to the exchange’s closure.
Crypto exchange Bitzlato suspends withdrawals following co-founder's money laundering guilty plea. #bitcoin #cryptonews #Bitzlato
— QuirkyBlock Crypto News & Analysis (@quirkyblock) December 29, 2023
In January, the U.S. Department of Justice (DOJ), in collaboration with the Treasury Department and European law enforcement agencies, executed an international crypto enforcement action leading to Legkodymov’s arrest.
The co-founder was held accountable for facilitating the transmission of over $700 million in illicit funds from criminals attracted to Bitzlato due to its lax user-identifying information requirements. Additionally, the exchange played a significant role as a service provider for darknet market participants and ransomware criminals.
In conjunction with Anatoly Legkodymov’s guilty plea and the closure of Bitzlato Exchange Freezes Withdrawals, European law enforcement agencies apprehended several other key figures associated with the cryptocurrency exchange.
Among those arrested were former CEO Mikhail Lunev, contractor Pavel Lerner, an undisclosed dev-ops engineer, and marketing director Alexander Goncharenko. The comprehensive law enforcement action signals a collective effort to address illicit activities tied to Bitzlato and underscores the seriousness with which authorities are treating such cases.
Bitzlato’s Ongoing Challenges and User Access
After the DOJ shut down Bitzlato’s operations and froze assets following Anatoly Legkodymov’s arrest, the exchange’s team provided users partial access to their holdings in March.
They converted total altcoin holdings to bitcoin (BTC), allowing customers to withdraw up to 50% of their funds to other exchanges or external wallets via a Telegram bot.
Despite this partial access, recent developments indicate a suspension of special balance withdrawals and technical support, creating uncertainty about when customers will fully regain access.
This temporary measure aims to prepare for upcoming court hearings related to the seizure of user assets in France. The Bitzlato team remains determined and optimistic about resolving this issue.
Reflecting on challenges in 2023, the team acknowledged the impact but highlighted that the exchange closed 70% of its balance when U.S. authorities halted services.
The situation underscores the complexities and uncertainties in the aftermath of regulatory actions against crypto platforms.
For any queries and suggestions contact us here.
