Bitfinex crypto exchange has been trying to recover over USD 800 mln in user funds seized by legal authorities in different states after its payment processor’s bank accounts were frozen.
Bitfinex and its sister company, stablecoin operator Tether, are the subject of civil lawsuits and an investigation by the New York Attorney General’s office alleging fraud and market manipulation. Still, Tether has denied the allegations in public statements, according to CoinDesk.
iFinex, Bitfinex’s parent company, applied for subpoenas in Colorado, Arizona, and Georgia in May 2020, asking federal courts to help it in deposing banks that may have held funds for Crypto Capital, the payment processor on which Bitfinex stored customers’ and exchange funds.
The exchange began to rely on Crypto Capital as other banking relationships deteriorated. Banks have grown wary of facilitating trade in cryptocurrency for fear of not complying with cross-border money laundering laws.
However, the manager of Crypto Capital, Ivan Manuel Molina Lee, was arrested by Polish authorities and charged with being a member of an international gang laundering up to USD 390 million ‘from illegal sources’. Federal prosecutors indicted a second principal of Crypto Capital, Oz Yosef, on charges of conspiracy to commit bank fraud, bank fraud, and conspiracy to operate an unlicensed money transmitting business. Oz Yosef’s sister, Ravid, was also indicted on fraud charges connected to Crypto Capital but remains at large in Israel.
Bitfinex hopes to trace how Crypto Capital moved money from one bank account to another to bolster its ownership claims over funds once held by the processor, according to the filings.
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