Bitzlato Prepares to Resume Operations Following Shutdown by Authorities

Two weeks ago, a little-known crypto exchange called Bitzlato was shut down in an attack coordinated by Europol and spearheaded by French and American authorities.

Now, the founders of the company are confident that they will resume operations soon.

Coordinated Efforts

Red-handed operations were carried out in these two countries, as well as Portugal, Spain, and Cyprus, where company sysadmins were arrested (and later released).

According to Europol, 46% of all transactions on Bitzlato have links to criminal activity, with over 1.5 million BTC between the exchange and the now defunct Hydramarket dark web platform.

”The analysis shows that about 46% of the assets exchanged through Bitzlato, worth approximately EUR 1 billion, are related to criminal activity. (…) Investigations show that 1.5 million BTC transactions have been made directly between Bitzlato and Hydramarket users, terminated in April 2022.”

The platform’s management team was exposed to money laundering allegations by US authorities, who accused them of laundering approximately $700 million for OFAC-based authorities.

Bitzlato denied the accusations, and the platform’s founder, who was previously detained in Miami, has since been released and expressed his intention to revive the platform immediately.

Operation Rush

According to Anatoly Legkodymov, the platform’s founder, the raid was carried out in a hurry due to the platform’s intention to move into the jurisdiction of the Russian Federation. Seeing as the founders were out and about only two weeks after the raid, it’s very likely that the operation was carried out without enough evidence to convict the platform’s management.

In an interview with Legkodymov, he stated that hot wallets containing around 35% of user funds were indeed seized by the authorities – most likely in France, where most of Bitzlato’s servers are located. According to Legkodymov, however, the hot wallet is coded in such a way as to be of no use to the authorities, and the funds in it will allegedly be returned to Bitzlato soon.

Legkodymov did not confirm the exact date on which the platform will be back online, only promising that it will be soon. He also stated that 50% of user funds in Bitcoin will be available for withdrawal the day the platform is up and running again. Withdrawals for other cryptocurrencies will restart soon after.