Maxwell Williams 
On February 2nd, the Turkish news agency Anadolu reported that Spanish authorities had apprehended the CEO of Hong Kong’s cryptocurrency exchange Bitzlato and its sales executive and marketing director. Additionally, a combined effort between France, Portugal, Cyprus, and US law enforcement also resulted in six Russian and Ukrainian nationals associated with this exchange being detained.
Nearly $20 Million in Digital Assets Were Seized
Spanish law enforcement has indicated that the anonymity of this exchange made it a favorite amongst criminal organizations looking to money laundering through digital currencies. As part of their investigation, authorities confiscated 18 million euros ($19.8 million) in cryptocurrency and luxury cars, along with cash, smartphones, and other items associated with the crime. In addition, over 100 accounts were blocked as part of the inquiry.
In an interview just two days prior, Bitzlato‘s co-founder Anton Shkurenko revealed that 50% of the Bitcoin held in its wallets would be available for withdrawal as soon as it relaunches. This follows after law enforcement seized around 35% of users’ funds stored in their hot wallets. Anticipating this move, Shkruenko affirmed that the new version of Bitzlato will operate from Russia and can not be subjected to legal authority.
The United States Sued Bitzlato on Money Laundering Charges
On Jan. 18, the U.S. Department of Justice declared an enforcement action against Bitzlato for their lack of compliance with Know Your Customer (KYC) and Anti-Money Laundering regulations that enabled cybercriminals to launder approximately $700 million via the exchange platform. On its heels, police seized a portion of money from Bitzlato‘s websites while simultaneously shutting them down; Anatoly Legkodymov, co-founder and Russian national living in China, was arrested by authorities in Miami on the same day as well.
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