iFinex Inc., Bitfinex’s parent firm, applied for subpoenas in Colorado, Arizona and Georgia this month, asking federal courts to aid it in deposing banks that may have held funds for Crypto Capital, the payment processor on which Bitfinex stored customers’ and exchange funds.
An entity hoping to confirm bank records can apply for a subpoena as banks cannot usually share those documents without a court order.
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iFinex applied for a subpoena Tuesday to depose SunTrust Bank employees in Georgia.This follows a similar subpoena application to depose the Bank of Colorado earlier in April and ABT & Trust in Arizona.Bitfinex is looking for evidence to support its legal claims to about $880 million held in bank accounts in Poland, Lisbon, London and elsewhere that have been seized by authorities pursuing anti-money laundering criminal charges against Crypto Capital.
Bitfinex’s application follows an initial subpoena request from October 2019, filed in California, where the exchange sought testimony from a former TCA Bancorp executive about Crypto Capital’s accounts.This subpoena was later granted .A federal judge likewise granted iFinex’s application in Arizona , while a magistrate judge in Georgia asked the company to file a corporate disclosure statement first.
“Crypto Capital used a bank account with Citibank, N.A.(‘Citibank’) to accept certain deposits from Applicant’s customers.The account was held in the name of ‘Global Trading Solutions, LLC,’” the filing in Arizona stated.
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Bitfinex General Counsel Stuart Hoegner told CoinDesk the filings “are aimed squarely at obtaining further information” about the funds held by Crypto Capital.
“As we have said before, Bitfinex is the victim of a fraud and is asserting its rights to funds taken by Crypto Capital through legal measures initiated in various countries,” he said through a spokesperson.
Yearlong search Bitfinex and its sister firm, stablecoin operator Tether, are the subject of civil lawsuits and an investigation by the New York Attorney General’s office alleging fraud and market manipulation.
Tether has denied the allegations in public statements .It has also aggressively issued more tether (USDT) since the investigation began; about $80 million in new USDT virtual currency on Thursday alone.
This raises the presumed market value of the currency to about $8 billion, an increase of about $2 billion over the last 40 days, according to the Whale Alert tracking service.
“When you’re looking at big tether issuances like that, you should look at how other currencies are acting in the market,” said Bennett Tomlin, a bitcoin writer and researcher who has been following the case closely.“The other stablecoins don’t seem to have the same kind of inflows.
And you will very rarely see tether redemptions.It almost always goes up.
Because we know from their lawyers that it’s not fully backed , I’m generally skeptical of larger issuances of tether.”
Bitfinex began to rely on Crypto Capital as other banking relationships deteriorated, the firm said in the Georgia filing.Banks have grown wary of facilitating trade in cryptocurrency for fear of running afoul of cross-border money laundering laws.
However, the president of Crypto Capital, Ivan Manuel Molina Lee, was arrested by Polish authorities in October and charged with being a member of an international gang laundering up to 1.5 billion złoty or about $390 million “from illegal sources.” Authorities wrote that Molina Lee’s crimes included “laundering dirty money for Columbian drug cartels using a cryptocurrency exchange.”
Federal prosecutors indicted a second principal of Crypto Capital, Oz Yosef, in October on charges of conspiracy to commit bank fraud, bank fraud and conspiracy to operate an unlicensed money transmitting business.
Oz Yosef’s sister, Ravid, was also indicted on fraud charges connected to Crypto Capital but remains at large in Israel..
