Bitcoin News Cryptocurrency Editor's Picks

Bitzlato Will Not Allow Bitcoin Withdrawals Due to Legal Issues

bitzlato bitcoin featured

The cryptocurrency exchange platform Bitzlato has made the decision to temporarily suspend all Bitcoin withdrawals, leaving its users in uncertainty regarding their assets. This measure arises in a context of legal confrontations and significant challenges for the company, marked by the guilty plea of Anatoly Legkodymov, co-founder and former CEO of Bitzlato.

Legkodymov admitted his involvement in operating an unlicensed money services business in a Brooklyn court, leading to the order to dissolve Bitzlato. This legal action also entailed the seizure of approximately $23 million in cryptocurrencies belonging to Legkodymov, as part of the consequences of his arrest in Miami earlier this year. The arrest was the result of a joint operation involving the United States Department of Justice, the Treasury Department, and French law enforcement, resulting in the seizure of a substantial portion of Bitzlato’s infrastructure, including its website.

bitzlato bitcoin post

The Legal Setback Against Bitzlato Former CEO Severely Harmed Exchange Users

Despite these legal challenges and asset seizures, the company managed to partially restore access to user funds in March. Using a Telegram bot, the platform allowed users to initially withdraw 50% of their assets that were locked in the exchange. Over the following months, withdrawal limits gradually increased, reaching 70% by November.

U.S. authorities, led by Prosecutor Breon Peace, did not hold back criticism against Bitzlato, accusing it of being an “open turnstile for criminals.” Furthermore, the Department of Justice pointed out that Bitzlato played a crucial role as a financial resource for the Hydra darknet marketplace, facilitating money laundering, including funds obtained through ransomware attacks.

This situation poses a direct impact on Bitzlato’s users, who have experienced a rollercoaster ride concerning their funds, from the initial asset seizure to the partial restoration of withdrawals. The outcome of the legal proceedings will determine the fate of these users’ assets, creating unsettling uncertainty for those affected by this situation.

Related posts

Cardano eyes a major breakout to topple Ethereum as the second-largest crypto token

Afroz Ahmad

The Majority of Russians don’t Understand how Cryptocurrency Works: Report

Joseph Alalade

Bitcoin Brief Break Above $9,000 Followed By Consolidation Points Towards Strong Selling Pressure

Lorenzo Stroe