According to a Feb. 2 report by Turkish news agency Anadolu, Spanish authorities have arrested the CEO, sales executive and marketing director of Hong Kong cryptocurrency exchange Bitzlato. In total, six Russian and Ukrainian nationals related to the exchange were arrested in a joint effort between France, Portugal, Cyprus and United States law enforcement.
As told by Spanish police, the exchange’s anonymity allowed it to become the platform of choice for criminal organizations seeking to launder money via cryptocurrency. Authorities 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.
The move comes just two days after co-founder Anton Shkurenko stated in an interview that 50% of the Bitcoin (BTC) held in Bitzlato wallets could be withdrawn the same day the exchange relaunches after investigators seized approximately 35% of users’ funds held in the exchange’s hot wallets. Regarding this matter, Shkruenko also explained that the new Bitzlato will be based in Russia and “out of reach of law enforcement authorities.”
On Jan. 18, the U.S. Department of Justice announced an enforcement action against Bitzlato, alleging that a lack of Know-Your-Customer and Anti-Money Laundering compliance helped cybercriminals launder over $700 million via the Bitzlato exchange. The same day, Bitzlato websites were shut down, with a portion of exchange funds seized by police. Its co-founder, Anatoly Legkodymov, a Russian national and resident of the People’s Republic of China, was arrested in Miami around the same day.