The CEO, sales and marketing director of the Bitzlato crypto exchange, was detained on February 2, by Spanish law enforcement authorities. Six Russian and Ukrainian citizens, who headed the exchange of cryptocurrencies, were detained.
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According to the Spanish authorities, the anonymity of the exchange enabled it to become a platform for criminal organizations that use cryptocurrency to defraud money.
Bitzlato co-founder Anton Shkurenko said that 50% of bitcoins stored in the crypto exchange's wallets might be withdrawn as soon as the exchange reopened. Previously, authorities seized 35% of user funds stored in Bitzlato. Shkurenko also said the new crypto exchange would be "out of reach of law enforcement agencies."
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Anatoly Legkodymov, the main shareholder and co-founder of Bitzlato, was imprisoned in Miami on January 18 and was found to be in violation of Know Your Customer and anti-money laundering regulations. On the same day, Bitzlato's websites were closed and some of the exchange's funds were confiscated.
According to authorities, the exchange traded more than $700 million in cryptocurrencies with Hydra Market, an "illegal online marketplace for drugs, stolen financial information, false documents, and money laundering services," which was shut down in April 2022 by US and German authorities.
