Shuttered Crypto Exchange Bitzlato opens withdrawals for users

Aside from recently shutting down some banks, regulators shut down a crypto firm allegedly doing illegal business. Bitzlato and its founder felt the power of the US Department of Justice when it shut down the exchange for allegedly processing illegal transactions worth more than $700 million.

However, in a recent development, users of the frozen crypto exchange Bitzlato were finally able to access half of their BTC funds that were stuck on the exchange for the past two months.

Bitzlato restores access to customers

Bitzlato crypto exchange restored access for customers to withdraw Bitcoin from the platform. The exchange conveyed the message through Telegram with a directive that users can only access 50% of their frozen funds on the platform.

They also need to use the Telegram bot ‘bz_phoenix_bot’, as highlighted in the message, to access their funds. This involves moving the funds to an external wallet or another crypto exchange.

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In addition, Bitzlato encouraged users to click the “Support Bitzlato” button while processing their withdrawals. This will help the exchange team restore justice and reclaim the remaining half of all assets.

While some users confirmed withdrawing their holdings, some selected to transfer to other exchanges such as Bybit. However, some users are keeping their money on Bitzlato, hoping that the platform will trade crypto by April this year.

All withdrawals from Bitzlato are in BTC as the exchange converted all its altcoin holdings to Bitcoin when the DOJ shut down the platform.

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Bitzlato involved in illegal crypto transactions and money laundering

In January of this year, the United States Department of Justice (DOJ) shut down the crypto exchange Bitzlato for engaging in illegal activities. According to his issued statementThe DOJ mentioned that the exchange operated an unlicensed money transfer business.

The exchange is said to have facilitated the transfer of illegally obtained cryptocurrencies worth over $700 million, in violation of US regulatory rules, mainly anti-money laundering (AML) requirements. Its illegal activities were said to have taken place between 2018 and 2022.

Furthermore, the statement cited that the exchange helped with some ransomware attacks as a platform for money transfer. It received over $15 million through ransomware attacks.

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Unlike other exchanges, US authorities noted that Bitzlato maintained minimal user identification and documentation requirements. Subsequently, the platform attracted more criminals and fraudsters in a series of illegal transactions.

In addition, Bitzlato is believed to have a connection with the Russian Hydra market through several crypto transactions. The Hydra market is a dark web illegal online market for stolen financial information, drugs, money laundering, fake ID documents, etc.

The exchange was accused of engaging users to process 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 the financial crimes allegedly committed through his exchange.

Featured image from Pexels and chart from Tradingview.com

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