In addition to recently shutting down some banks, regulators are shutting down crypto companies that are allegedly doing illegal business. Bitzlato and the founder felt the power of the US Department of Justice when closing the exchange for allegedly processing illegal transactions worth more than $700 million.
However, in a recent development, users of the frozen crypto exchange Bitzlato have finally been able to access half of their BTC funds that have been stuck on the exchange for the past two months.
Bitzlato Restores Access to Customers
Bitzlato exchange crypto restored access for customers to withdraw Bitcoin from the platform. The exchange sent a message via Telegram with the directive that users can only access 50% of the funds frozen on the platform.
Also, they need to use the Telegram bot ‘bz_phoenix_bot,’ as highlighted in the message, to access the funds. This includes transferring funds to external wallets or other crypto exchanges.
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Additionally, Bitzlato encourages users to click the ‘Bitzlato Support’ button when processing a withdrawal. This will help the exchange team restore justice and recover half of all assets.
While some users are confirmed to cancel their ownership, some choose to transfer to another exchange like Bybit. However, some users have deposited their funds in Bitzlato, hoping that the platform will start trading crypto in April this year.
All withdrawals from Bitzlato are in BTC because the exchange converted all of its altcoin holdings to Bitcoin when the DOJ shut down the platform.
Bitzlato Engages In Illegal Crypto Transactions And Money Laundering
In January of this year, the United States Department of Justice (DOJ) shut down crypto exchange Bitzlato for engaging in illegal activities. According to its statement releasedThe DOJ alleged that the exchange was operating an unlicensed money transmitting business.
The exchange allegedly facilitated the transfer of more than $700 million worth of illegally obtained cryptocurrencies in violation of US regulatory rules, particularly anti-money laundering (AML) requirements. The illegal activities are said to be from 2018 to 2022.
Furthermore, the statement claims that the exchange has helped some ransomware attacks as a platform for fund transfers. It received over $15 million siphoned through a ransomware attack.
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Unlike other exchanges, US authorities noted that Bitzlato maintains minimal user identification and documentation requirements. In turn, the platform attracts more criminals and fraudsters in many illegal transactions.
Additionally, Bitzlato is believed to have ties to Russia’s Hydra Market through several crypto transactions. Hydra Market is a darknet illegal online marketplace for stolen financial information, narcotics, money laundering, fraudulent ID documents, etc.
The exchange was accused of involving users in processing illegal funds from the Hydra Market, which was shut down in April 2022 through the joint efforts of US and German law enforcement agencies.
The Federal Bureau of Investigation (FBI) arrested the founder of Bitzlato, Anatoly Legkodymov, to answer for financial crimes allegedly committed through the exchange.
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