Bitfinex Claims to be Fraud Victim in CryptoCapital Indictment
Bitfinex has denied connections to laundering funds related to Columbian drug cartels, and differentiated itself from the shadow banking activities of CryptoCapital.
Bitfinex, the beleaguered exchange, denied to be actively aware and supportive of CryptoCapital’s shadow banking activity. In a statement issued last Friday, the exchange denies knowledge and support of activities that allegedly used shadow banking and the exchange’s activity to launder funds.
“Bitfinex is the victim of a fraud and is making its position clear to the relevant authorities, including those in Poland and the United States. 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,” explained Bitfinex.
Bitfinex, which until recently operated only with large-scale deposits above $10,000, has lost access to at least $850 million and possibly as much as $880 million, due to the investigation against CryptoCapital.
The service, which offered banking for crypto exchanges, including the troubled QuadrigaCX exchange, is undergoing an international investigation for money laundering. Recently, Polish authorities arrested Ivan Manuel Molina Lee. Earlier, the principal of Crypto Capital, Oz Yosef, faced an indictment on fraud and money laundering during a hearing with the U.S. Attorney’s Office of the Southern District of New York.
What is even more curious, just as events were turning negative for Bitfinex, the price of Bitcoin (BTC) went through the roof. Over the weekend, the Tether minting wallet was also active, and big tranches of USDT were noted coming to and from exchanges, including Bitfinex.
BTC broke out from the $7,500 range, reaching $10,000 again, before settling around $9,500. Currently, Bitfinex has a smaller influence on the BTC price, but the coincidence of the recent statement and the rally may be related.
In the past, Tether has become more active during periods with bad news, including the start of the CryptoCapital investigation in April, as well as the New York Attorney General process.
Bitfinex also stated that despite the allegations, it will continue to seek access to its funds. Right now, Bitfinex has patched the hole by taking a loan from Tether, Inc.
Despite the BTC rally, the price of Unus Sed Leo (LEO) remained at around $0.96, failing to react with the rest of altcoins. The LEO asset is seen as behaving in a way that suggests manipulated trading.