HomeCryptoBitzlato Prepares to Resume Operations Following Shutdown by Authorities

Bitzlato Prepares to Resume Operations Following Shutdown by Authorities

Two weeks ago, a little-known crypto exchange called Bitzlato was shut down in a raid coordinated by Europol and spearheaded by French and American authorities.

Now, the company’s founder believes it will soon resume operations.

A Coordinated Effort

The sting operation was carried out in the two aforementioned countries, as well as Portugal, Spain, and Cyprus, where the firm’s sysadmin was arrested (and subsequently freed).

According to Europol, 46% of all transactions on Bitzlato had links to criminal activity, with over 1.5 million BTC of them between the exchange and the now-defunct dark web platform Hydramarket.

”The analysis indicated that about 46 % of the assets exchanged through Bitzlato, worth roughly EUR 1 billion, had links to criminal activities. (…) Investigations showed that 1.5 million BTC transactions have been made directly between Bitzlato users and the Hydramarket, taken down in April 2022.”

The platforms’ management team was hit with money laundering charges by the U.S. authorities, who accused them of laundering around $700 million for OFAC-centred authorities.

Bitzlato denied the allegations, and the founder of the platform, formerly detained in Miami, has been released and stated his intention to bring the platform back online shortly.

Rushed Operation

According to Anatoly Legkodymov, the founder of the platform, the raid was carried out in a hurry due to the platform’s intention to move to the jurisdiction of the Russian Federation. Seeing as the founder is already out and about just two weeks after the raid, it’s probable that the operation was done without enough evidence to convict the platform’s management.

In the interview with Legkodymov, he stated that a hot wallet containing about 35% of the users’ funds was indeed seized by the authorities – most probably in France, where a good part of Bitzlato’s servers were located. However, according to Legkodymov, the hot wallet was coded in such a way that it is useless to the authorities, and the funds within will allegedly be returned to Bitzlato shortly.

Legkodymov did not confirm the exact date on which the platform will be back online, only promising that it will be soon. He also stated that 50% of users’ funds in Bitcoin will be available for withdrawal the day the platform is up and running again. Withdrawals for other cryptocurrencies would be restarted shortly after.


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