Bitzlato, a cryptocurrency exchange linked to Russia, has partially resumed access to user funds, although it has been formally detained by European authorities.

On 20 March, Bitzlato announced on its Telegram channel that Bitzlato had enabled its users to withdraw up to 50 per cent of their assets stranded on the platform as a result of law enforcement by the United States and Europol.

According to the statement, Bitzlato users can now recover half of their assets using Telegram robot-BZ_Phoenix_bot-, which allows users to transfer assets from online Bitzlato accounts to external wallets or exchanges.

All withdrawals from Bitzlato are processed on BTC, as the platform converts all alternative coins held by users into BTC when services are stopped on Jan. 18. The company said that after the seizure of Bitzlato, Bitzlato had to convert user balances into bitcoins because of technical difficulties related to maintaining multiple alternative coins.

In a public chat on Bitzlato, several alleged Bitzlato users said they could transfer bitcoin to exchanges such as ByBit and Binance. According to reports, some so-called Bitzlato customers also use software wallets such as Trust Wallet and ViaBtc, as well as hardware wallets such as Ledger to extract bitcoin.

Bitzlato's 50% exit option follows its previously announced roadmap for restoring user access to the platform and resuming operations. According to the plan, Bitzlato will continue to resume work on the platform, with the goal of providing services for peer-to-peer cryptocurrency transactions by early April 2023.

Some users prefer not to withdraw 50 per cent of their assets from Bitzlato this time and choose to wait until the exchange resumes P2P trading. A spokesman for Bitzlato told Cointelegraph that once the P2P platform is restored, users will be able to access all previously available features.

Once a P2P exchange is launched, Bitzlato users should not expect to recover the remaining 50 per cent of their assets, the representative said.

A spokesman for Bitzlato added: "once P2P is launched, there will be no second half, because these are two unrelated issues and processes."

According to the representative, the issue of client funds had not yet been resolved, but Bitzlato planned to return funds from the company by resuming the use of funds seized by Europol or from the company's funds. The spokesman said:

The lawyers challenged the French government's decision, and if the result is favourable, the money will be returned. If the problem cannot be solved, users will have to wait until the company makes enough money to make up for the loss.

As previously reported, the United States Department of Justice announced a major international password enforcement action against Bitzlatow in mid-January. Europol later said that European authorities had seized more than $19 million in passwords from Bitzlatow as part of law enforcement.