The Russia-linked cryptocurrency exchange Bitzlato announced a temporary halt on certain withdrawal requests on Dec. 27, despite having had its assets seized by French authorities in January.

The company wrote in a Telegram message:

“… We are faced with the need to suspend special balance withdrawals and technical support. This is a temporary measure to prepare for and go through the upcoming court hearings regarding the seizure of user assets in France.”

Bitzlato did not say which transactions are classified as “special balance withdrawals,” nor did it state whether the withdrawal freeze is limited to France.

Bitzlato closed since January

Bitzlato’s assets and infrastructure were seized by French authorities and other international law enforcement, including the U.S., in January. The company’s website is currently closed and displays a message from authorities.

Nevertheless, Bitzlato said in its latest statement that it was “able to close 70% of the balance” that it held when its service was closed, apparently in spite of any seizure. The company provided no elaboration on how it would meet those obligations with its assets frozen.

The U.S. Treasury has identified FinCEN as a money laundering concern connected to illegal Russian financing and has prohibited transactions with the exchange. The U.S. Department of Justice has separately highlighted Bitzlato’s role in money laundering and other crimes, alleging that the exchange laundered $700 million in connection to Hydra Market, a now-defunct Russian darknet market.

Several company executives have also been prosecuted. On Dec. 6, Bitzlato founder Anatoly Legkodymov pleaded guilty in the U.S. and agreed to forfeit $23 million to prosecutors. He has not been sentenced but faces up to five years in prison. European authorities also arrested senior management linked to Bitzlato in January 2023.