One of the founders of the Russia-linked Bitzlato exchange, which was seized by Western law enforcement, has announced that it plans to relaunch and allow partial withdrawals. The trading platform team members also intend to transfer the company to the Russian Federation.
The co-founder says Exchange will provide access to users’ funds
Crypto exchange Bitzlato is taking steps to restore operations and immediately allow customers to withdraw bitcoin, one of its founders, Anton Shkurenko, said in an interview with Satoshkin Live, a Youtube channel dedicated to investing and trading in digital currencies, quoted by the major Russian-language cryptocurrency. News outlets Forklog and Bits.media.
In January, the Hong Kong-registered platform was seized as part of an international law enforcement action that US authorities described as a “blow to crypto crime.” It allegedly processed $700 million in illicit funds received from criminal entities such as darknet marketplace Hydra and Russian crypto scheme Ponzi Finiko.
Another co-founder, Anatoly Legkodimov, a Russian national residing in China, was arrested in Miami and several other team members were arrested in Europe. The service was disrupted with the participation of the French authorities, who took control of its servers and removed its website.
Shkurenko told Satoshkin host Dmitry Stepanin that French officers were able to take over the Bitzlato hot wallet which at the time was storing about 35% of users’ funds in various cryptocurrencies. He did not specify the exact amount but denied reports claiming the total amount exceeded $1 billion.
The executive also denied accusations that the company evaded taxes and asserted that it has always adhered to know-your-customer and anti-money laundering regulations under European laws while cooperating with law enforcement authorities to prevent illegal activities. He also expressed hope that the charges would be dropped soon and the detainees released.
Four Bitzlato employees were arrested with Europol’s participation and Shkurenko revealed their identities – former CEO Mikhail Lunev, marketing director Alexander Goncharenko, Pavel Lerner, the contractor working on the Monolithos DAO implementation, and a system administrator identified as Konstantin. The latter was released on bail in Cyprus.
Cryptocurrency exchange Bitzlato moves to Russia
The co-founder said Bitzlato is currently auditing its losses, and revealed that the company plans to move to Russia and renew its activities under Russian jurisdiction. Right now, Bitzlato is looking for an infrastructure contractor, he said.
As for paying users, Anton Shkurenko confirmed that customers will be able to withdraw 50% of BTC in Bitzlato wallets on the day the platform goes live again. Holdings in altcoins will be gradually released without specifying a timeline.
The world’s largest cryptocurrency exchange, Binance, which has been one of the biggest beneficiaries of Bitzlato, has reportedly processed $346 million in funds from the platform, and has banned some Bitzlato user accounts in Eastern Europe and the CIS after a law enforcement operation. The leading exchange later said it had restored access to most of these accounts.
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