Bitzlato Restores Partial Access to BTC Holdings 2 Months After Shutting Down
The cryptocurrency exchange – Bitzlato – enabled customers to withdraw up to 50% of their bitcoin funds stuck on the venue.
The US Department of Justice (DOJ) closed the firm in January for allegedly processing more than $700 million worth of illegal funds and arrested its founder – Anatoly Legkodymov.
Granting Some Access
The company revealed that users could withdraw a maximum of 50% of their assets previously frozen by the authorities. Those willing to do so should use the Telegram bot – bz_phoenix_bot – to move funds to another exchange or an external wallet.
Each withdrawal is processed in bitcoin since the firm converted all altcoin holdings into BTC when the US DOJ shut down the platform nearly two months ago.
The company further urged clients to press the “Support Bitzlato” button when using the feature, which could help the team “restore justice” and grant access to the remaining 50% of assets.
Some users have already withdrawn their holdings, while others maintained they were able to move their stash to other exchanges, such as Bybit. On the other hand, some prefer to keep their ownings at Bitzlato, hoping the entity would provide a service for peer-to-peer (P2P) cryptocurrency trading by early April 2023.
The platform made the headlines in mid-January after the US DOJ, supported by Europol, halted its operations. According to the officials’ charges, it was a hotbed of criminal activity, processing over $700 million worth of illicit transactions.
The DOJ also detained Bitzlato’s founder – Anatoly Legkodymov – on accusations that he managed an unlicensed money-transmitting business. Prosecutors insisted that the exchange did not implement necessary anti-money laundering standards and required only minimal authorization from customers.
“The result was that Bitzlato became a safe haven for criminals, like drug dealers and ransomware groups. They knew that when the police traced their funds to Bitzlato, Bitzlato would not be able to turn over its users’ true identities,” Breon Peace – a US attorney in Brooklyn – stated.
The Connection With Hydra Market
Several sources indicated that the Russia-linked Bitzlato facilitated a substantial sum of illicit cryptocurrency transactions for users of Hydra Market. The latter was a Dark Web marketplace involved in drug trafficking, money laundering, and other criminal activities.
German law enforcement agents closed its servers in April 2022, confiscating 543 BTC, worth about $25 million at the time.
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