On April 27th, 2021, a coordinated raid by Europol, French and American authorities shut down the little-known crypto exchange Bitzlato. According to Europol, 46% of all transactions on Bitzlato had links to criminal activity, with 1.5 million BTC of them between the exchange and the now-defunct dark web platform Hydramarket. The platform’s 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.
The founder of the platform, Anatoly Legkodymov, was detained in Miami and has since been released. He believes that the platform will soon resume operations, and that a hot wallet containing about 35% of the users’ funds was seized by the authorities. Legkodymov claims that the hot wallet was coded in such a way that it is useless to the authorities, and the funds within will 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.
The raid on Bitzlato was likely done in a hurry due to the platform’s intention to move to the jurisdiction of the Russian Federation. This could explain why the founder of the platform was released so soon after the raid, as it is possible that the operation was done without enough evidence to convict the platform’s management.
It remains to be seen when Bitzlato will be back online and what the implications of the raid will be for the platform and its users. In the meantime, the crypto community awaits the return of the platform with anticipation.
