Bitzlato Temporarily Suspends All Bitcoin Withdrawals Due To Legal Battles
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Bitzlato Temporarily Suspend All Bitcoin Withdrawals Due To Legal Battles

  • Legal battles force Bitzlato to temporarily suspend Bitcoin withdrawals.
  • Uncertainty surrounds users’ assets amid ongoing legal disputes.
  • Co-founder’s guilty plea shakes cryptocurrency exchange Bitzlato.

Bitzlato, a cryptocurrency exchange platform, has temporarily suspended all Bitcoin withdrawals just weeks after its co-founder, Anatoly Legkodymov, pled guilty to operating an unlicensed money services business and agreed to dissolve the exchange. 

The move comes as the company faces legal challenges related to seizing its assets in France. Despite the suspension, Bitzlato expresses determination and optimism regarding the situation.

Bitzlato’s Founder’s Guilty Plea Leads To The Dissolution

Bitzlato’s former CEO, Anatoly Legkodymov, made a significant decision in a Brooklyn court. He pleaded guilty to one count of operating an unlicensed money services business and agreed to dissolve Bitzlato. 

Additionally, Legkodymov was ordered to forfeit $23 million worth of cryptocurrency. 

This legal action stemmed from his arrest in Miami earlier in the year, which was part of a joint operation involving the United States Department of Justice, Treasury Department, and French law enforcement. 

This operation resulted in the seizure of a substantial portion of Bitzlato’s infrastructure, including its website.

See Also: Is Ledger Live Tracking Each And Every Move Of Its Users?

Partial Restoration Of User Funds

Despite the challenges posed by the legal proceedings and asset seizures, Bitzlato managed to partially restore access to user funds in March. 

Using a Telegram bot, the platform allowed users to withdraw 50% of their assets that had been stuck on the exchange. 

Over the subsequent months, the withdrawal limits gradually increased, reaching 70% by November.

The United States Attorney, Breon Peace, did not mince words when addressing Bitzlato’s alleged activities. He accused the cryptocurrency exchange of serving as an “open turnstile by criminals.” 

The Department of Justice (DOJ) also alleged that Bitzlato had played a crucial role as a financial resource for the Hydra darknet marketplace, enabling users to launder funds, including those obtained through ransomware attacks.

See Also: Website Suffers From DDoS Spam Attack Causing A Time Out

Impact On Users

Bitzlato’s users will likely be closely monitoring the developments surrounding the temporary suspension of Bitcoin withdrawals. 

Many have already experienced a rollercoaster ride with 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, and the uncertainty can be unsettling for those affected.

Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. Crypto is not a legal tender and is subject to market risks. Readers are advised to seek expert advice and read offer document(s) along with related important literature on the subject carefully before making any kind of investment whatsoever. Crypto market predictions are speculative and any investment made shall be at the sole cost and risk of the readers.