Crypto Capital executive Oz Yosef was charged with multiple crimes by the U.S. Attorney’s Office of the Southern District of New York.
As stated in the court documents from October 23, Yosef was indicted on 3 counts, including bank fraud, conspiracy to commit bank fraud, and conspiracy to perform unlicensed money transmitting service.
According to the documents, Yosef texted to an anonymous source “regarding the need to transfer $10,000,000 to a bank located in the Bahamas, knowing that the funds would be transferred from a bank account maintained with a bank located in Manhattan, New York.”
Among other things, the documents mention a list of certain assets including those held by Crypto Capital principal Reginal Fowler who’s indicted on participating in a scheme that involved transferring money into several anonymous cryptocurrency exchanges.
The news broke out shortly after Crypto Capital’s boss, Ivan Manuel Molina Lee, was detained by Polish law enforcement on suspicion of laundering nearly 1.5 billion zloty or $350 million linked to a Colombian drug cartel. The local press also reported that Lee was associated with $350 million worth of assets previously confiscated by the Polish Ministry of Justice from Crypto Capital’s Polish subsidiary, Crypto Sp. z. Oo.
Over the past few months, the fellowship between Bitfinex and Crypto Capital had raised concerns, as Bitfinex stated that the liquidity problems occurred because the exchange couldn’t access $880 million worth of its funds that were in possession of Crypto Capital.
Bitfinex has recently filed with a California court to subpoena the ex-vice president of TCA Bancorp, Rondell Clyde Monroe, stating that Monroe retained information about the funds held by the banking platform.
According to the subpoena, the exchange asserted that TCA Bancorp offered banking services to Crypto Capital and that the company had “used one or more accounts held at TCA Bancorp to facilitate the transfer of funds.”
Additionally, in August 2018, Crypto Capital told Bitfinex that roughly $500 million of its funds were seized by authorities in Poland and Portugal. When Bitfinex demanded proof of the frozen funds, Crypto Capital sent a reference letter signed by Monroe saying that over $300 million worth of its funds were in possession of TCA Bancorp by Global Trade Solutions AG.
In response to Yosef’s arrest, Bitfinex issued a statement on October 25, calling itself “the victim of a fraud.”
The exchange stated it “relied upon various systematic representations from Crypto Capital, including from Molina and Yosef, that proved to be false.” “Among those misrepresentations, Crypto Capital regularly referred to its integrity, banking expertise, robust compliance program, and financial licenses. This was designed to assure us that Crypto Capital was capable of handling Bitfinex’s transactions.”
“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,” added Bitfinex.
The exchange also said that the money laundering discoveries will not prevent it from recovering its funds from Poland and other countries’ authorities.