Russia-related Bitzlato ignores sanctions and allows customers to withdraw 50% of their funds in Bitcoin.
Sanctioned cryptocurrency exchange, Bitzlato has announced that it would partially allow users to access their funds despite existing restrictions by European authorities.
On January 18th, the United States Justice Department (DOJ) charged Bitzlato's co-founder and shareholder Anatoly Legkodymov, a Russian national, with operating an unlicensed money exchange business and processing more than $700 million in illicit funds.
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Despite ongoing sanctions from the United States and Europol, Bitzlato has now given its users a green light to withdraw up to 50% of assets stuck in the crypto exchange.
The news was revealed via its official Telegram channel on March 20th. The allegedly illegal cryptocurrency exchange announcement noted:
Bitzlato users can now restore half of their assets using the Telegram bot — bz_phoenix_bot — which allows users to move assets from the web Bitzlato account to an external wallet or exchange.
According to the firm, all customer withdrawals from Bitzlato will now be processed in Bitcoin (BTC). Bitzlato noted that it had to convert user altcoin balances to Bitcoin in an attempt to ease technical difficulties associated with the sanctions implied in January.
Bitzlato’s 50% withdrawal option was launched after the firm outlined plans for a phased resumption of operations. According to the procedure, Bitzlato will enable user access and continue working towards restoring the platform.
On top of that, the company also revealed that by early April, it plans to launch a peer-to-peer (P2P) cryptocurrency trading service.
However, despite the 50% withdrawal option, several Bizlato users have opted to wait until the exchange restores P2P trading rather than withdraw the allowed limit.
However, in a recent statement, a Bitzlato spokesperson warned that users should not expect to recover the remaining 50% of their assets once the P2P exchange is launched, as issues surrounding client funds have not yet been fully resolved.
At the end of January, Europol seized over $19 million (€ 18 million) worth of crypto from wallets tied to crypto exchange Bitzlato. It also “took down the service’s digital infrastructure in France.”
