Russia-linked cryptocurrency exchange, Bitzlato, has partially restored user access to deposited funds. On March 20, the company announced that users could withdraw up to 50% of their assets that had been previously frozen due to enforcement actions by both the United States and Europol.
According to the announcement, Bitzlato users can now withdraw their assets using the exchange’s Telegram bot to transfer them to an external wallet or exchange. However, before initiating the transfer, users must verify their Bitzlato accounts by providing their email addresses. Once verified, users will receive a code in their email inbox that is required to finalize the transaction.
Bitzlato will process all withdrawals in Bitcoin (BTC) since the platform converted all altcoin holdings to BTC when its service was suspended on January 18. Bitzlato claimed they had to convert user balances into Bitcoin due to technical difficulties associated with servicing multiple altcoins after Bitzlato was seized.
Several users of Bitzlato have claimed that they successfully transferred their BTC to exchanges like ByBit and Binance. Some other users claimed to have used hard wallets such as Ledger and software based wallets such as Trust Wallet and ViaBTC.
Bitzlato’s 50% withdrawal option follows their previously stated timeline for restoring user access. The plan outlined the company’s aims to restore peer-to-peer (P2P) cryptocurrency trading on the platform by the beginning of April 2023.
European authorities shut down the Hong Kong-registered exchange’s office in France due to accusations of facilitating illegal transactions worth over $1 billion. The US Justice Department also arrested the exchange’s CEO, Anatoly Legkodymov, and accused the exchange of processing over $700 million in illicit funds. These funds were linked to multiple criminal enterprises and individuals, such as Hydra, formerly a prominent darknet market seized by German authorities in April 2022, and Finiko, Russia’s largest cryptocurrency pyramid scheme.
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