Russia-linked cryptocurrency exchange Bitzlato, seized by Western law enforcement, plans to relaunch and allow partial withdrawals, a co-founder has announced. Members of the trading platform team also intend to move the business to the Russian Federation.
Co-founder says exchange will provide access to user funds
The Bitzlato cryptocurrency exchange is taking steps to restore operations and immediately allow clients to withdraw bitcoins, one of its founders, Anton Shkurenko, said in a statement. interview with Satoshkin Live, a Youtube channel dedicated to cryptocurrency trading and investing, quoted by leading Russian-language cryptocurrency news outlets Forklog and Bits.media.
In January, the Hong Kong-registered platform was taken down as part of an international police action described by US authorities as a “blow against cryptocrime.” It allegedly processed $700 million of illicit funds received from criminal entities such as the Hydra darknet marketplace and the Russian Finiko crypto Ponzi scheme.
Its other co-founder, Anatoly Legkodymov, a Russian citizen living in China, was arrested in Miami and several other team members were detained in Europe. The service was disrupted with the involvement of the French authorities who took control of their servers and took down their website.
Shkurenko told Satoshkin’s host, Dmitry Stepanin, that French officials were able to seize Bitzlato’s hot wallet which at the time stored around 35% of user funds in various cryptocurrencies. He did not specify the exact amount, but denied reports that the total exceeds $1 billion.
The executive also denied accusations that the company has evaded taxes and said it has always complied with know-your-customer and anti-money-laundering rules under European laws while cooperating with law enforcement to prevent illegal activities. He also expressed the hope that the charges would soon be dropped and the detainees released.
Four Bitzlato employees have been arrested with the involvement of Europol and Shkurenko revealed their identities: former CEO Mikhail Lunev, marketing manager Alexander Goncharenko, Pavel Lerner, a contractor working on the implementation of Monolithos DAO and an identified sysadmin like Konstantin. The latter has been released on bail in Cyprus.
Bitzlato cryptocurrency exchange to move to Russia
Bitzlato is currently auditing its losses, the co-founder said, further revealing 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.
Regarding the reimbursement of user funds, Anton Shkurenko assured that clients will be able to withdraw 50% of the BTC in Bitzlato wallets on the launch day of the platform. Altcoin holdings will be released gradually, he added without specifying a timetable.
The world’s largest cryptocurrency exchange Binance, which was one of the largest recipients of Bitzlato, having reportedly processed $346 million of funds from the platform, blocked some Bitzlato user accounts in Eastern Europe and the Commonwealth of Independent States later of the police operation. The leading exchange later said that it has restored access to most of these accounts.
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