Bitfinex, a Hong Kong-based crypto exchange is having a hard time, to say the least. They’ve been forced to deny an endless stream of media reports that alleged a link between them and the illegal activities done by the owners of Crypto Capital. Polish media sources have started to send out reports that Ivan Manual Molina, president of Crypto Capital, was arrested by Polish authorities.
The case is a large one, involving a long list of connected individuals and many details regarding it. All of these things culminate into fingers pointing towards Bitfinex as a possible money launderer for Columbian drug cartels. Bitfinex rather quickly started to try and cover for this implication. They released a public statement where they deny any and all involvement.
They said that they could not speak for Crypto Capital’s other clients. However, they state that Bitfinex’s association with any form of money laundering done by Crypto Capital was “categorically false.” Bitfinex directly opposed the claims thrown around by Polish news outlets. These claims suggested that Bitfinex was implicated in a $390 million money-laundering operation.
RMF 24, a Polish media source reported Crypto Capital had two companies that were likely affiliated with them, both specializing in money laundering. The financial operations’ scale indicates that they were being used by Columbian drug cartels, in order to hide proceeds made from smuggling drugs into Europe. Bitfinex defended itself by explaining that the firm had relied on numerous representations given by Crypto Capital that ultimately proved false.
Through these misrepresentations, pushed by Molina and Yosef as well, Crypto Capital frequently cited the firm’s banking expertise, financial licenses, integrity, and compliance programs.
Bitfinex cautions that this new situation could spark another in-depth investigation within the US.
A Past History
Crypto Capital and Bitfinex have both already been involved with each other in a legally questionable manner. Bitfinex was unable to gain access to over $850 million in corporate and client funding, held back by Crypto Capital. Until a week ago, Bitfinex has claimed that the funds were seized, but not lost. While this made the funding theoretically recoverable, things get complicated in verifying information or even give an accurate timeline for its recovery.
Reportedly, the funds were seized by various governments including Portugal, the US, and Poland from the Panamanian payment processor. It’s come to the point where it’s hard to tell what’s true and what’s not from Bitfinex’s story. At first assumption, one would guess the Bitfinex is just as guilty as Crypto Capital in whatever it is they’ll be found guilty of, in the end.
Crypto Capital had seized a good chunk of Bitfinex’s funds suggest that Bitfinex was roped into this without complete knowledge. However this will play out, Bitfinex will take a massive hit from this. Whether innocent or guilty, the firm’s future looks grim.