BitZlato suspends withdrawals weeks after founder agrees to break up exchange
Weeks after Bitzlato's co-founder agreed in a Brooklyn court to defund the crypto exchange as part of a guilty plea, the Bitzlato team has announced that it will “temporarily suspend” all Bitcoin withdrawals.
In a December 27 post on his Telegram channel, he said this is a temporary measure while preparations are made and further legal hearings are underway regarding the users' assets held in France.
“We are full of determination and optimism in this matter,” he said.
However, on December 6, Bitzlato's former CEO, Anatoly Legkodimov, agreed to dissolve Bitzlato and pay $23 million in cryptocurrency as part of a guilty plea to operating financial services without a license.
The founder was arrested in Miami in January after a joint operation by the US Department of Justice, the Treasury Department and French law enforcement saw the seizure of much of the company's infrastructure, including its website.
Although the exchange and its assets were seized, Bitzlato was able to partially restore users' funds.
The company continued to increase the amount users could spend in the following months, reaching 70 percent in November.
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U.S. Attorney General Bren Pease slammed the crypto exchange as an “open loophole for criminals,” while the DOJ alleged that it was a “critical source of funding” for Hydra's deadnet marketplace, which allows users to deposit funds, including those from ransomware attacks. .
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