Troubled Crypto Exchange Bitzlato Seeks to Make Comeback

The co-founder of Bitzlato stated that they will allow 50% of user funds in Bitcoin held in Bitzlato wallets to be withdrawn on the same day we launch.

As per the latest development, the defunct crypto exchange Bitzlato is looking to make a comeback once again in the market. The Hong Kong-based crypto change Bitzlato has been charged with money laundering and got its servers seized in a major international operation earlier this month.

In a recent interview, the Bitzlato co-founder said that the company is planning to resume operations and facilitate partial withdrawals of user funds. Forklog has summarized YouTube interview in Russian where Bitzlato co-founder Anton Shkurenko said that police seized the exchange’s hot wallets which contained 35% of user funds in all cryptocurrencies at the time.

Now, Shkurenko also stated that the exchange would reopen at an unspecified time. And he said that with “100% certainty” that “we will allow 50% of user funds in bitcoin held in Bitzlato wallets to be withdrawn on the same day we launch. For other cryptocurrencies, the launch will be gradual.”

In mid-January 2023, Bitzlato was charged with laundering over $700 million in funds linked to Russian criminals. Recently, co-founder Anatoly Legkodymov was arrested in law enforcement operations along with several other Bitzlato executives. Legkodymov is a Russian citizen and a majority owner of Bitzlato living in China. His arrest, however, took place in Miami.

Europol, the police agency of the European Union stated that Bitzlato had exchanged, more than $1 billion in assets linked to criminal activities.

Binance Processed Major Sums for Bitzlato

As per the latest market report, crypto exchange Binance had processed a staggering $350 million for Bitzlato. As per the data compiled by blockchain analytics firm Chainalysis, crypto exchange Binance had processed more than 20,000 Bitcoins in over 205,000 transactions for Bitzlato since 2018.

Besides, crypto exchange Binance was also among the largest receiver of funds as more than $175 million was transferred from Bitzlato to Binance. In August 2021, a staggering $90 million of transfers took place between the two exchanges.

Binance said that they have provided “substantial assistance” to FinCEN to support their investigation further. Finland-based LocalBitcoins also clarified it has never had “any kind of cooperation or relationship” with Bitzlato. It is too early to say that Bitzlato will really comeback again very soon in time.

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Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.