Bitfinex says it was conned and it was not involved in laundering but fell a victim of fraud by Crypto Capital which is a payment processor that allegedly lost $880 million of the exchange’s money. In our blockchain news today, we take a closer look at what more happened over the week and check the further developments.
The president of Crypto Capital Ivan Manuel Molina Lee was arrested on Thursday by the Polish Police on charges of money laundering. The authorities wrote that Molina Lee’s crimes included laundering dirty money for Columbian drug cartels using a cryptocurrency exchange. In the statement that was released on Friday, Bitfinex said it will make its position clear to the US and Polish authorities and will still pursue the funds that Crypto Capital lost.
According to the statement, Crypto Capital misrepresented the ‘’integrity, banking expertise, robust compliance, program, and financial licenses’’ to bitfinex. Molina Lee was wanted in Poland for laundering up to 1.5 billion zloty which is more than $290 million, from illegal sources according to reports in the Polish newspaper W Polityce. Bitfinex says it was conned and denied the rumors that it played any role in the Crypto Capital money laundering scheme. The Bitfinex general counsel Stuart Hoegner stated:
“We cannot speak about Crypto Capital’s other clients, but any suggestion that Crypto Capital laundered drug proceeds or any other illicit funds at the behest of Bitfinex or its customers is categorically false.’’
On the other side of the Bitfinex news, The exchange submitted a filing on October 18 to a court in California for obtaining the permission to take the deposition testimony of Rondell “Rhon” Clyde Monroe, who is a former vice president of TCA Bancorp. They also seek to obtain documentation of Monroe’s communication with Crypto Capital staffers. This filing comes as part of the ongoing proceedings for Bitfinex, where the exchange seeks to recover around $880 million of its funds held at its payment processor Crypto Capital which was said to be frozen by multiple government agencies.
Meanwhile, the exchange is also under investigation by the New York Attorney General’s Office for allegedly using a loan from its sister company Tether and covering up the frozen funds without disclosing anything to its customers.
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