Bitzlato CEO Arrested by Spanish Authorities

Joshua Ramos
Source: Reuters

Cointelegraph has reported that the Bitzlato CEO has been arrested by Spanish authorities this week. The report notes that the CEO’s arrest brings the total to six Russian and Ukrainian nationals related to the exchange arrested in a collaborative effort between France, Portugal, Cyprus, and the US.

Bitzlato has been a prominent headline in the cryptocurrency industry due to the criminal enterprise uncovered in recent months by authorities. Spanish police stated that the anonymity of the exchange fueled its status among criminal organizations seeking money laundering avenues through digital assets.

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Additionally, the Cointelegraph report notes that “Authorities have seized $19.8 million (18 million Euros) in digital assets, luxury cars, cash, smartphones and other items related to the investigation and blocked over 100 exchange accounts.”

Moreover, the arrest comes just days after statements made by co-founder Anton Shkurencko regarding the exchange’s Bitcoin custody and its solvency despite the investigation. Shkurenko reported stated 50% of Bitcoin held by the exchange could be withdrawn “the same day the exchange relaunches after investigators seized approximately 35% of users’ funds held in the exchange hot wallets.”

Jan. 18 saw the US Department of Justice announce it would be taking enforcement action against the exchange. Subsequently noting that a lack of KYC and anti-money laundering compliance “helped cybercriminals launder over $700 million via the Bitzlato exchange.”

Following the announcement, Bitzlato’s website was shut down, with funds being seized by authorities. The exchanges co-founder and Russian national, Anatoly Legkodymov, was arrested in Miami the same day as the announcement,