Bitzlato Prepares to Resume Operations Following Shutdown by Authorities

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

Now, the company’s founder believes it will soon resume operations.

A Coordinated Effort

The sting oper­a­tion was car­ried out in the two afore­men­tioned coun­tries, as well as Por­tu­gal, Spain, and Cyprus, where the firm’s sysad­min was arrest­ed (and sub­se­quent­ly freed).

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

”The analy­sis indi­cat­ed that about 46 % of the assets exchanged through Bit­zla­to, worth rough­ly EUR 1 bil­lion, had links to crim­i­nal activ­i­ties. (…) Inves­ti­ga­tions showed that 1.5 mil­lion BTC trans­ac­tions have been made direct­ly between Bit­zla­to users and the Hydra­mar­ket, tak­en down in April 2022.”

The plat­forms’ man­age­ment team was hit with mon­ey laun­der­ing charges by the U.S. author­i­ties, who accused them of laun­der­ing around $700 mil­lion for OFAC-cen­tred authorities.

Bit­zla­to denied the alle­ga­tions, and the founder of the plat­form, for­mer­ly detained in Mia­mi, has been released and stat­ed his inten­tion to bring the plat­form back online shortly.

Rushed Operation

Accord­ing to Ana­toly Legkody­mov, the founder of the plat­form, the raid was car­ried out in a hur­ry due to the platform’s inten­tion to move to the juris­dic­tion of the Russ­ian Fed­er­a­tion. See­ing as the founder is already out and about just two weeks after the raid, it’s prob­a­ble that the oper­a­tion was done with­out enough evi­dence to con­vict the platform’s management.

In the inter­view with Legkody­mov, he stat­ed that a hot wal­let con­tain­ing about 35% of the users’ funds was indeed seized by the author­i­ties – most prob­a­bly in France, where a good part of Bitzlato’s servers were locat­ed. How­ev­er, accord­ing to Legkody­mov, the hot wal­let was cod­ed in such a way that it is use­less to the author­i­ties, and the funds with­in will alleged­ly be returned to Bit­zla­to shortly.

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 users’ funds in Bit­coin will be avail­able for with­draw­al the day the plat­form is up and run­ning again. With­drawals for oth­er cryp­tocur­ren­cies would be restart­ed short­ly after.

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