Banking fraud at Bitcoin Exchanges: Crypto Capital worked for Bitfinex and Quadriga

A new indictment leads to findings in the case of the Bitcoin exchange Bitfinex. So this depends on a service provider with the Canadian stock exchange QuadrigaCX: Crypto Capital. The US judiciary is now taking its operators to court for illicit banking

The Bitcoin ecosystem struggles again and again with trust reversals. Recent entanglements between the Bitfinex Stock Exchange and the Stable Coin provider Tether Limited have cast serious doubt on their credibility. Now there are new insights: One of its service providers, Crypto Capital, connects them to the Canadian stock exchange QuadrigaCX.

What is Crypto Capital doing?

On its official homepage Crypto Capital expressly does not call itself a crypto exchange on which Bitcoin, Ripple & Co. can trade. Rather, they provide bank accounts for platforms, companies and individuals who want to trade fiat and cryptocurrencies. Founded in 2013, Crypto Capital Corporation also defines itself as a “private Fiat banking platform that supports any crypto-blockchain.”

Operator in court

According to a statement from the U.S. Department of Justice in New York, two people now have to answer to the US authorities for bank fraud: Reggie Fowler and Ravid Yosef. Fowler also faces allegations of unlicensed transfer operations. As the Scenemagain The Block reports, the two defendants are in contact with Crypto Capital as employees of Global Trading Solutions LLC, the parent company of Crypto Capitals. In order to get their banking licenses, they should, however, have pretended to use the respective accounts only for real estate transactions. The Bitcoin stores apparently kept her secret.

As we have previously reported, Crypto Capital is a linchpin in the current Bitfinex scandal. The secret transactions that promptly helped out Tether Limited Bitfinex and eventually led to the current lawsuit were handled by Crypto Capital Corp. from. This can be seen in a tweet from October last year:

“Bitfinex is now banking with HSBC through a private account of Global Trading Solutions.” It’s also worth mentioning that all EUR, JPY and GBP deposits are paused but Bitfinex “expects the situation to normalize within a week” Banking issues?

    – Larry Cermak (@lawmaster) October 6, 2018

“Bitfinex now operates its banking business with HSBC through the private accounts of Global Trading Solutions, which is very appropriate if you ask me […].

First arrests and confiscations

As Modern Consensus now reports elsewhere, the authorities have already confiscated initial funds in the case of Bitfinex; however, the authorities arrested Ravid Yosef.

If convicted, Fowler and Yosef face up to 30 years imprisonment if convicted of bank fraud and attempting to conspire to bank fraud in at least one case. Fowler also faces the allegation of having engaged in an unauthorized money transfer transaction. He faces an additional five years imprisonment.

What puts CryptoCapital under additional pressure or their ailing reputation is not likely to be beneficial, is the list of their partners. As you can see from her official homepage, she supported another bitcoin exchange in the past: QuadrigaCX. This, too, made headlines in the past as the sudden and unexplained death of its operator resulted in the loss of millions of customer funds.