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Over the years, there have been numerous allegations of wrongdoings by the Bitfinex exchange. None of those claims have ever been proven. In a recent announcement, the company claims it too fell victim to the business practices by Crypto Capital. A somewhat surprising turn of events, albeit it would explain a few things. 

The Crypto Capital Problem

Numerous companies have come and gone in the cryptocurrency world over the years Some of those which disappeared have been charged with fraud, embezzlement, and money laundering, among other things. The latest company to be put in this category is Crypto Capital. Its President was arrested in Poland this week and is suspected of laundering money over a span of multiple years.

Although most people might not know this company by name, it had fingers in many pies. Their main business model revolves around providing financial services to cryptocurrency exchanges. Their list of clients spans Bitfinex, Binance, Kraken, and many others. Crypto Capital’s bank accounts were seized earlier, effectively freezing $350m worth of funds.  For now, the investigation is still ongoing until further notice. 

The Bitfinex “Victim Angle”

Given how Crypto Capital and Bitfinex have worked together, it is evident there will be plenty of interest as to how this business relationship worked exactly. The exchange’s parent company claims Crypto Capital is responsible for the $850m worth of customer funds the company “misplaced” a while ago. As a result of that loss, the company was forced to create a new token and raise additional funds that way. All affected users were eventually repaid in full, yet many questions linger as to what went on exactly. 

In its statement, Bitfinex also claims they are a victim of fraud and aims to collaborate with the proper authorities in this regard. There is a genuine concern as to how CC may have laundered drug cartel money through Bitfinex’s platform. If that can effectively be proven, things do not look good for either party. Bitfinex claims these statements are false, albeit the investigation will yield the final verdict. It also appears the company will continue to pursue any customer funds still controlled by Crypto Capital or its President Ivan Manuel Molina Lee. 

A Positive Development Overall

When looking at the bigger picture, it is good to see the criminals active in the cryptocurrency being brought to charges. If Crypto Capital was effectively involved in nefarious activity, they will need to pay the price for doing so in one way or another. The same goes for any other company they worked with that willingly aided them in achieving their goal. As far as Bitfinex is concerned, the recent revelations may provide a lot more clarity as to what happened behind the scenes of this company in recent years. 

Image(s): Shutterstock.com



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