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Oz Yosef, a principal executive officer at cryptocurrency investment and payment processing firm Crypto Capital, has been indicted by the United States Attorney for the Southern District of New York. According to a court filing shared with multiple news sources, Yosef was charged on three criminal counts, including bank fraud, conspiracy to commit bank fraud, and conspiracy to operate an unlicensed money transmitting business in the United States.
Crypto Capital may have put Bitfinex in trouble
Court documents cited a transaction where Yosef had sent a text message to an unnamed recipient concerning making a $12,000,000 wire transfer to a bank based out of the Bahamas, with full knowledge that the money would be sent from an account domiciled in New York.
Following investigations by authorities and other international investigative bodies, Crypto Capital saw its funds frozen this past spring. Of those funds seized were some $880 million, which belonged to cryptocurrency exchange Bitfinex. These funds are suspected of having been the trigger to a case between Bitfienx (as well as its sister company, Tether Limited) and the New York Attorney General (NYAG), where the exchange was of having covered up about $850 million in losses and lying to investors.
The case between Bitfinex and the NYAG has dragged on for the better part of one year now, and while both parties have had arguments over jurisdiction and a wide array of issues, it is expected that the case will continue to be tried for the foreseeable future.
A company in a mess
As for Crypto Capital, the company might not survive the onslaught from law enforcement. On October 24, barely a day after Yosef was hit with his indictments, Ivan Manuel Molina Lee, the president of the Panama based company, was arrested by Polish law enforcement authorities. According to a report by local news outlet wPolityce, Molina Lee was arrested on suspicions of money laundering and involvement with drug trafficking.
As wPolityce reported, a European Arrest Warrant had been issued by the prosecutor’s office in Wrocław, and it connected Molina Lee with 1.5 billion zlotych (about $390 million) in illegal funds that were seized by the Polish Ministry of Justice. The funds were said to belong to Crypto SP. Z.O.O., a Polish firm that has strong affiliations to Crypto Capital.
Per the report, Molina Lee was arrested based on suspicions that he had helped launder a Colombia drug cartel’s money through a cryptocurrency exchange.
Bitfinex throws Crypto Capital under the bus
Crypto Capital itself is in surrounded with problems. The company has more or less become radioactive to everyone else. On October 25, Bitfinex published a press release addressing the payment processor in the wake of Molina Lee’s arrest, claiming that the exchange was a victim too.
Statement in response to arrest of Crypto Capital principal by Polish authorities https://t.co/dGef6vWEed
— Bitfinex (@bitfinex) October 25, 2019
In the press release, Bitfinex reiterated its commitment to pursuing the funds lost by Crypto Capital, adding that the payment processor had misrepresented “integrity, banking expertise, robust compliance program, and financial licenses” in a bid to win its trust.
“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… any suggestion that Crypto Capital laundered drug proceeds or any other illicit funds at the behest of Bitfinex or its customers is categorically false,” the exchange concluded.