Earlier this week, Bitfonex put out an official statement distancing themselves from Crypto Capital Exchange following the arrest of their CEO for money laundering charges. Crypto Capital had previously acted as a payment processor for Bitfinex and also worked with some of the biggest names in the industry such as Kraken and Binance. According to Bitfinex, they were the victims of fraud as actions taken by Crypto Capital Exchange led to them losing access to hundreds of millions of dollars in a case they are still trying to resolve.
On October 23, 2019, a United States Court for the Southern District of New York inducted Oz Youssef, who is A Crypto Capital executive on conspiracy to commit bank fraud, bank fraud and conspiracy to operate an unlicensed money transmitting business.
This new indictment seems to back up Bitfinex’s previous claims of fraud and as according to them, the firm spread out over $800 million worth of their funds in several bank accounts abroad which made it hard for them to access. As a result of this, they allegedly turned to Tether to give them access to their reserves in order to cover up this issue and this was eventually revealed in an investigation from the New York Attorney General’s office.
These issues, they say, come from the false representation that was presented by Crypto Capital Exchange as well as Its Executives Including Oz Youseff who Is now being indicted on these claims.
“Among those misrepresentations, Crypto Capital regularly referred to its integrity, banking expertise, robust compliance programme and financial licences. This was designed to assure us that Crypto Capital was capable of handling Bitfinex’s transactions,” the statement said.
Youseff is not the only prominent individual from Crypto Capital Exchange that has been arrested as recently as Ivan Manuel Molina Lee, their president, was arrested by authorities on the suspicion of money laundering on behalf of an international drug cartel and this was in relation to $350 million that was seized by Polish authorities. Regardless, this incidents are likely the first step in the unraveling of the mystery that is Crypto Capital and perhaps could shed more light on the Tether-Bitfinex situation by the end of the trial.