Bitzlato to Restore Operations and Withdrawals From Russia, Co-founder Vows

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Russia-linked cryptocurrency exchange Bitzlato, seized by Western law enforcement, plans to relaunch and permit partial withdrawals, a co-founder announced. Members of the trading platform’s team also intend to relocate the business to the Russian Federation.

Co-Founder Says Exchange Will Provide Access to User Funds

Crypto exchange Bitzlato is taking steps to restore operations and immediately permit customers to withdraw bitcoin, one of its founders, Anton Shkurenko, said in an interview with Satoshkin Live, a Youtube channel devoted to crypto investment and trading, quoted by major Russian-language crypto news outlets Forklog and Bits.media.

In January, the Hong Kong-registered platform was busted as part of an international law enforcement action described by U.S. authorities as a “blow to crypto crime.” It allegedly processed $700 million of illicit funds received from criminal entities such as the darknet market Hydra and the Russian crypto Ponzi scheme Finiko.

Its other co-founder, Anatoly Legkodymov, who is a Russian national residing in China, was arrested in Miami and several other team members were detained in Europe. The service was disrupted with the participation of French authorities who took control of its servers and took down its website.

Shkurenko told Satoshkin’s host, Dmitry Stepanin, that French officers were able to seize Bitzlato’s hot wallet which at the time stored around 35% of user funds in various cryptocurrencies. He did not specify the exact amount but denied reports claiming that the total exceeds $1 billion.

The executive also denied accusations that the company has evaded taxation and assured it has always complied with know-your-customer and anti-money laundering regulations under European laws while cooperating with law enforcement to prevent illegal activities. He also expressed hope that soon the charges will be dropped and the apprehended people released.

Four Bitzlato employees have been arrested with the participation of Europol and Shkurenko revealed their identities – former Executive Director Mikhail Lunev, Marketing Manager Alexander Goncharenko, Pavel Lerner, a contractor working on the implementation of the Monolithos DAO, and a system administrator identified as Konstantin. The latter has been released on bail in Cyprus.

Cryptocurrency Exchange Bitzlato to Relocate to Russia

Bitzlato is currently auditing its losses, the co-founder said and further unveiled that the company plans to move to Russia and renew its activities under Russian jurisdiction. Right now, Bitzlato is looking for an infrastructure contractor, he said.

As for the repayment of user funds, Anton Shkurenko assured that customers will be able to withdraw 50% of the BTC in Bitzlato wallets on the day the platform is launched again. Holdings in altcoins will be released gradually he added without specifying a timetable.

The world’s largest crypto exchange, Binance, which was one Bitzlato’s biggest recipients, having reportedly processed $346 Million of funds from the platform, blocked some accounts of Bitzlato users in Eastern Europe and the Commonwealth of Independent States following the law enforcement operation. The leading exchange later said it has restored access to most of these accounts.

Do you think crypto exchange Bitzlato will be able to refund users if it restores operations? Tell us in the comments section below.