Bitzlato Co-Founder Anton Shkurenko Arrested as the Crypto Exchange Relaunches

The co-founder of cryptocurrency exchange Bitzlato was briefly detained for questioning in Moscow at the request of Interpol, after which he was released.
According to authorities, Shkurenko said the exchange did everything to cut off criminals and “is not ashamed” of its work.

As reported on Tuesday by the Russian Telegram channel Baza Anton Shkurenko, the co-founder of the crypto exchange Bitzlato, has been arrested in Moscow. The entrepreneur was wanted by French investigators who suspect him of extortion, data theft, and money laundering.

Bitzlato was taken down in an international law enforcement operation led by the Department of Justice (DOJ) in January.

The Hong Kong-registered exchange processed over $ 700 million of illicit funds to what its CEO Anatoly Legkodymonce described as “crooks” breaking all rules designed to thwart money laundering. Notably, more than €18 million in cryptocurrency was seized.

The exchange began its operations in 2017 by Shkurenko and his partner Anatoly Legkodymov, after launching the previous year as a trading bot called BTC Banker which facilitated peer-to-peer transactions.

Legkodymov, the Russian national residing in China, was arrested by U.S. authorities in Miami last month. An earlier report by Baza claims that about a year ago he transferred his share in Bitzlato to his partner and left the post of CEO.

The European Union Agency for Law Enforcement Cooperation (Europol) detained another three Bitzlato executives — the company’s current CEO, financial director, and marketing director — and a system administrator, in Spain and Cyprus. French law enforcement authorities took control of its servers and its website.

The Federal Bureau of Investigation (FBI) is alleging that criminal proceeds from ransomware attacks, hacks, scams, and extortions passed through Bitzlato. According to data from blockchain analytics firm Chainalysis, the world’s largest crypto exchange, Binance, transferred cryptocurrency worth nearly $346 million to the platform.

My guess is that LocalBitcoins is shutting down because the business is just too risky to operate.

In FinCEN's recent designation of Bitzlato, for instance, LocalBitcoins was named one of Bitzlato's top counterparties.

That's dangerous company to keep.https://t.co/gcMwiBpg1S pic.twitter.com/9wvwTtvHqu

— John Paul Koning (@jp_koning) February 9, 2023

Russian authorities are yet to decide whether to extradite Anton Shkurenko to France, the report noted. The news of his arrest comes after last week he said in an interview with a crypto Youtube channel that Bitzlato’s remaining team intends to relocate the business to Russia and relaunch operations, including withdrawals.

In another development regarding the case, Bitzlato is taking steps to restore operations and immediately permit customers to withdraw bitcoin, one of its founders, Anton Shkurenko, said in an interview with Satoshkin Live, a Youtube channel devoted to crypto investment and trading, quoted by major Russian-language crypto news outlets Forklog and Bits. media.