The chief executive officer, sales executive, and marketing director of the Hong Kong cryptocurrency exchange Bitzlato have been detained in Spain, according to a story that was published on February 2 by the Turkish news agency Anadolu. In all, six Russian and Ukrainian people were taken into custody in connection with the transaction as a result of a collaborative operation by law enforcement agencies from the United States of America, France, Portugal, and Cyprus.
According to the information provided by the Spanish authorities, the anonymity provided by the exchange made it possible for it to become the platform of choice for criminal groups wanting to launder money through cryptocurrencies. In connection with the investigation, the authorities were able to recover digital assets worth $19.8 million (18 million euros), luxury vehicles, cash, cellphones, and other goods. Additionally, they were able to freeze over 100 exchange accounts.
This move comes just two days after Bitzlato co-founder Anton Shkurenko stated in an interview that 50% of the Bitcoin (BTC) held in Bitzlato wallets could be withdrawn the same day the exchange relaunches after investigators seized approximately 35% of users' funds held in the exchange's hot wallets. The move comes just two days after Shkurenko stated that 50% of the Bitcoin (BTC) held in Bitzlato wallets could be withdrawn the same day. In relation to this topic, Shkruenko provided further information by stating that the new Bitzlato would have its headquarters in Russia and will be "beyond the grasp of law enforcement officials."
The United States Department of Justice (DOJ) took enforcement action against Bitzlato on January 18, alleging that the cryptocurrency exchange did not comply with Know-Your-Customer and Anti-Money Laundering regulations, which allowed cybercriminals to launder more than $700 million through the Bitzlato platform. On the same day, the websites associated with Bitzlato were taken down, and a percentage of the cash associated with the exchange were confiscated by the authorities. Anatoly Legkodymov, a Russian citizen who was living in the People's Republic of China at the time of his detention, was one of the company's co-founders and was taken into custody in Miami on the same day.