Russia-linked cryptocurrency exchange Bitzlato has managed to partially restore access to user funds despite being officially seized by European authorities.
Bitzlato has allowed its users to withdraw up to 50% of the assets that were stuck on the platform due to the control measures of the United States and Europol, the firm Announced on his Telegram channel on March 20.
According to the statement, Bitzlato users can now restore half of their assets using the @bz_phoenix_bot Telegram bot, which allows users to move assets from the Bitzlato web account to an external wallet or exchange.
All Bitzlato withdrawals are processed in Bitcoin (BTC) as the platform converted all users’ altcoin holdings into BTC at the time the service was stopped on January 18. According to the firm, Bitzlato had to convert user balances into Bitcoin due to technical issues. difficulties associated with servicing multiple altcoins after the Bitzlato seizure.
In a public Bitzlato chat, several alleged Bitzlato users saying that they were able to move their Bitcoin to exchanges like ByBit and Binance. According to reports, some alleged clients of Bitzlato also used software wallets like Trust Wallet and ViaBtc, as well as hardware wallets like Ledger to withdraw your Bitcoin.
Bitzlato’s 50% withdrawal option follows its previously announced roadmap to restore user access to the platform and resume operations. According to the plan, Bitzlato will continue his work to restore the platform and goals to provide a peer-to-peer (P2P) cryptocurrency trading service in early April 2023.
Several users have preferred not to withdraw 50% of their assets from Bitzlato this time around, opting to wait until the exchange reinstates P2P trading. Once the P2P platform is restored, users will be able to access all the features that were previously available, a Bitzlato spokesperson told Cointelegraph.
Bitzlato users should not expect to recover the remaining 50% of their assets once the P2P exchange launches, the representative said.
“There won’t be a second half once P2P opens up, as these are two unrelated issues and processes,” the Bitzlato spokesperson said.
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According to the representative, the problem with client funds has not yet been resolved, but Bitzlato plans to return the money by restoring access to funds seized by Europol or to the company’s own funds. said the spokesman.
“Lawyers have challenged the French government’s decision, and if the outcome is favorable, the funds will be returned (…) If it doesn’t work, users will have to wait until the company earns enough to make up for the losses.”
As previously reported, the US Department of Justice announced a major international cryptocurrency enforcement action against Bitzlato in mid-January. Europol later reported that European authorities seized more than $19 million worth of cryptocurrency from Bitzlato as part of enforcement actions.
