In its recent announcement, the Hong Kong-based crypto exchange Bitzlato confirmed the suspension of Bitcoin withdrawals. The indefinite withdrawal came days after the co-founder of Bitzlato, Anatoly Legkodymov, pleaded guilty at a court in Brooklyn.
At the beginning of this year, the Russian national was accused of running a money transmitter that supported the transfer of an illicit $700 million fund.
Bitzlato Suspends Withdrawal
The co-founder of the troubled crypto exchange faced multiple criminal charges. In his recent arraignment, Legkodymov admitted that Bitzlato supported the transfer of measurable amounts of funds generated from illicit activities such as drug trafficking, hydra market and money laundering.
According to the court report, Legkodymov agreed to dissolve the embattled crypto exchange and settle a $23 million forfeit for breaching the law. Following the court judgment, the Bitzlato team took decisive action to comply with the ongoing legal charges facing Mr.Legkodymov.
In a Telegram post, the Bitzlato team described the suspension of Bitcoin withdrawals as a temporary measure the crypto exchange took amid the ongoing legal action against the firm.
The disgraced crypto exchange regretted that following the multiple legal charges facing Bitzlato and its top-level executive, the company will suspend the crypto withdrawal and halt technical support services.
Bitzlato Facing Multiple Legal Charges
The report demonstrates that the indefinite suspension of withdrawals will enable the crypto exchange to prepare for the upcoming court hearing with the French regulators.
Following the arrest of Legkodymov in Miami by officials from the US Department of Justice and French authority, Bitzlato has filed multiple legal charges. A few months ago, the French regulators seized substantial assets from Bitzlato, including the company website.
In an earlier report, the US attorney Breon Peace accused Bitzlato of being an “open turnstile for criminals.”
The heightened regulatory scrutiny against Bitzlato has forced the controversial crypto exchange to take strategic actions and comply with the ongoing court proceedings. In the latter, the Bitzlato officials expressed their optimism despite the litanyof legal charges.
After the French regulators seized assets, the crypto exchange allowed the customers to withdraw 50% of their assets locked on Bitzlato.
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