Russia-linked cryptocurrency exchange Bitzlato announced on December 27 that it was temporarily halting some withdrawal requests, despite the seizure of its assets by French authorities in January.
The company wrote in a Telegram message:
“…We are faced with the need to suspend special balance withdrawals and technical support. This is a temporary measure to prepare for and pass the upcoming legal hearings regarding the seizure of users’ property in France.
Bitzlato did not specify which transactions are classified as “special balance withdrawals”, nor whether the withdrawal freeze is limited to France.
Bitzlato closed since January
Bitzlato’s assets and infrastructure were seized by French authorities and other international law enforcement agencies, including the United States, in January. The company’s website is currently closed and displays a message from the authorities.
Nonetheless, Bitzlato said in its latest statement that it was “able to close 70% of the balance” it held when it closed its service, apparently despite any seizure. The company provided no details on how it would meet these obligations with the freezing of its assets.
The US Treasury has identified FinCEN is a money laundering business linked to illegal Russian financing and has banned transactions with the exchange. The US Department of Justice has separately Underlines Bitzlato’s role in money laundering and other crimes, alleging the exchange laundered $700 million in connection with Hydra Market, a now-defunct Russian darknet market.
Several business leaders were also prosecuted. On December 6, Bitzlato founder Anatoly Legkodymov pleaded guilty in the United States and agreed to hand over $23 million to prosecutors. He has not been convicted but faces up to five years in prison. The European authorities also senior executives arrested linked to Bitzlato in January 2023.
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