In recent developments, the Bitzlato team has announced a halt on all Bitcoin withdrawals, citing the need for a temporary pause. This decision was disclosed in a Telegram post on December 27, where the company explained it was a preparatory step for the upcoming legal proceedings related to user assets held in France, maintaining an optimistic stance on the issue.
This announcement comes shortly after the co-founders of Bitzlato agreed to dissolve the exchange following a guilty plea in a Brooklyn court. On December 6, Anatoly Legkodymov, the former CEO, consented to shut down Bitzlato and forfeit $23 million in cryptocurrencies, admitting to running an unlicensed money transfer business. His arrest in Miami in January was part of a collaborative effort by U.S. and French law enforcement, along with the U.S. Justice and Treasury Departments, leading to a significant seizure of the company's infrastructure.
Despite these setbacks, Bitzlato managed to regain partial functionality, allowing users to retrieve up to 50% of their assets starting in March through a Telegram bot. The withdrawal limit was progressively increased, reaching 70% by November.
U.S. Attorney Breon Peace has criticized Bitzlato for allegedly serving as a conduit for criminal transactions. The Justice Department further implicated the exchange as a crucial financial hub for the Hydra darknet market, facilitating money laundering activities, including proceeds from ransomware attacks.
