Recently, Live Bitcoin News reported that the president of Crypto Capital had been arrested for allegedly taking part in drug running and money laundering schemes. We also reported that further arrests were expected in the coming weeks. One of those arrests has now taken place.
More Bad News for Crypto Capital
Oz Yosef, a principal executive of the company, is charged with being the man responsible for the loss of roughly $850 million in crypto funds transferred to the company by Bitfinex, one of the world’s most popular cryptocurrency exchanges. The charges claim that Yosef conspired to potentially commit bank fraud, wire fraud and a desire to “operate an unlicensed money transmitting business.”
Some of the primary evidence against Yosef is a text he sent last year to an unnamed source regarding the transfer of approximately $10 million to a bank based in the Bahamas. These funds, the text mentions, would ultimately come by way of a bank stationed in Manhattan, New York. It is believed that Yosef was specifically looking to launder funds and hide it from financial authorities.
Court documents say that Yosef will also be forced to “forfeit listed assets” representing proceeds that can be traced to the “commission of said offenses.” Several assets are listed in the documents, including those held by other executives and team members of Crypto Capital.
Bitfinex has long been adamant that it was never a part of Crypto Capital’s allegedly illegal dealings. It has always stated that it was a victim of the platform, and that the money it sent Crypto Capital was designed to be held and stored away. This situation seems to confirm that, though at press time, it appears the funds in question were never actually taken but rather frozen by financial regulators in both Portugal and Poland.
In addition, Bitfinex has also faced allegations from the New York Attorney General’s office that it had lost the money in question and that it used a Tether-based loan to cover those losses.
Bitfinex states that it has not engaged in any criminal activity and has long denied the Attorney General’s claims, explaining:
Among those misrepresentations, Crypto Capital regularly referred to its integrity, banking expertise, robust compliance program and financial licenses. This was designed to assure us that Crypto Capital was capable of handling Bitfinex’s transactions.
2019 Has Been Wrought with Fraud Cases
2019 has brought about new cases of crypto fraud that make 2018 look tame. Overall, it is estimated that approximately $4.3 billion in crypto funds will have either been stolen or gone missing by the end of this year.
Among the biggest cases of crypto theft to have occurred since the beginning of 2019 are those involving Binance, which lost more than $40 million in BTC funds by way of cyberthieves last May.