The US Attorney for the Southern District of New York indicted Oz Yosef, an executive at Crypto Capital, on three criminal counts.
According to an October 23 court filing, Oz Yosef was indicted by US authorities on charges involving conspiracy to carry out bank fraud, bank fraud, and conspiracy to run an unregistered money transmitting service.
The filing seems to acknowledge accusations from digital asset exchange Bitfinex, which recently released a statement in which it claimed that it was a victim of fraudulent activities, allegedly carried out by Crypto Capital, the exchange’s former payments processor.
On April 25 2019, the New York Attorney General’s (NYAG) office issued a statement in which it claimed that Bitfinex lost $850 million and then tried to cover the shortfall by borrowing funds from sister company Tether Ltd.
However, Bitfinex’s management says that Crypto Capital spread the company’s money across several financial institutions in different countries, which has made it quite difficult to access the funds.
Bitfinex’s support team noted that the Panama-headquartered payments processing firm handled funds for and on behalf of the exchange for several years. Moreover, Bitfinex says it was depending upon its representations, including those made by Yosef, which were allegedly misleading.
The exchange stated:
“Among those misrepresentations, Crypto Capital regularly referred to its integrity, banking expertise, robust compliance program and financial licences. This was designed to assure us that Crypto Capital was capable of handling Bitfinex’s transactions.”
Bitfinex’s management had previously said that any allegation that Crypto Capital was laundering money upon the exchange’s request or its clients is “categorically false.”
Ivan Manuel Molina Lee, president at Crypto Capital, was taken into police custody by Poland’s authorities on October 24, after he was suspected of laundering illicit funds and being part of a major international drug cartel.
Lee had been detained on a European Arrest Warrant that was issued by the prosecutor’s office in Wrocław. Lee’s arrest appears to be linked to $350 million that had been confiscated earlier by Poland’s Ministry of Justice.