Users of Seized Exchange Bitzlato get Access to 50% of Funds
Despite being seized by European authorities, Bitzlato, the Russia-linked cryptocurrency exchange, has restored partial access to user funds.
Bitzlato has announced that its users can now withdraw up to 50% of assets previously stuck on the platform due to enforcement actions taken by the United States and Europol.
Users can use the Telegram bot @bz_phoenix_bot to move assets from their web Bitzlato accounts to an external wallet or exchange. All withdrawals from Bitzlato are processed in Bitcoin, as the platform converted all altcoin holdings by users into the flagship cryptocurrency when the service was halted on January 18.
The service had to convert user balances into BTC due to technical difficulties servicing multiple altcoins after the business was seized.
Bitzlato’s 50% withdrawal option follows its previously announced roadmap on restoring users’ access to the platform and resuming operations. The company plans to restore the platform and provide a peer-to-peer (P2P) cryptocurrency trading service by early April 2023.
Some users have chosen not to withdraw 50% of their assets from Bitzlato at this time, opting to wait until the exchange restores P2P trading. Once the P2P platform is up and running, users will be able to access all functions that were previously available.
However, Bitzlato has yet to resolve the issue with the remaining 50% of user funds. According to a Bitzlato spokesperson, the company plans to return the money by restoring access to seized funds by Europol or from its own funds.
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Bitzlato’s lawyers have disputed the decision of the French government. If the outcome is favorable, the funds will be returned. However, if it does not work out, users will have to wait until the firm earns enough to compensate for the losses.
The US Department of Justice announced a major international crypto enforcement action against Bitzlato in mid-January. European authorities seized more than $19 million in crypto from the exchange as part of the enforcement actions.