Bitzlato's chief executive was arrested by Spanish authorities this week. The report noted that following the CEO’s arrest, France, Portugal, Cyprus and the United States joined forces to arrest six Russian and Ukrainian nationals linked to the exchange.
Bitzlato has been making headlines in the cryptocurrency industry in recent months as authorities uncovered criminal enterprises. Spanish police say the exchange’s anonymity has fueled its status among criminal organizations looking to launder money through digital assets.
Additionally, Cointelegraph reported that “authorities seized $19.8 million (€18 million) in digital assets, luxury vehicles, cash, smartphones, and other items related to the investigation, and blocked more than 100 trading accounts.”
Moreover, the arrests came despite the investigation, just days after co-founder Anton Shkurencko issued a statement about the exchange’s Bitcoin custody and its solvency. Shkurenko reported that 50 percent of the bitcoin held by the exchange could be withdrawn “on the same day the exchange relaunched after investigators confiscated approximately 35 percent of user funds held in the exchange’s hot wallets.”
On Jan. 18, the U.S. Department of Justice announced that it would take enforcement action against the exchange. It then noted that the lack of KYC and AML compliance “helped cybercriminals launder over $700 million through the Bitzlato exchange.”
Following the announcement, Bitzlato’s website was shut down and funds were seized by authorities. The exchange’s co-founder, Russian national Anatoly Legkodymov, was arrested in Miami on the same day the announcement was made.
