Following the loud arrest of the Crypto Capital president in Poland, fraud charges were brought against another head of Crypto Capital, a company that is allegedly responsible for the loss of Bitfinex’s hundred millions of dollars.
Crypto Capital CEO Oz Yosef was indicted on three criminal counts by the US Attorney for the Southern District of New York. According to court documents, Oz Yosef was accused of conspiracy to commit bank fraud, bank fraud itself and conspiracy to conduct an unlicensed payment service.
Oz Yosef, whose whereabouts is unknown, founded and managed a Panamanian company that for years had provided banking services to large crypto companies, including Binance, Bitfinex, Kraken, BitMEX and the now-bankrupt QuadrigaCX. Crypto Capital allegedly used services of large banks, including HSBC, but without their knowledge that they were dealing with a crypto payment service.
The list of documents filed by the prosecutor’s office includes a letter in which Yosef reportedly demanded to transfer $10 million from an account in a Manhattan-based bank to an account in a Bahamas-based bank.
In the spring of 2019, as a result of an international investigation, the funds in Crypto Capital accounts were frozen. Among the confiscated funds were $880 million owned by Bitfinex, which subsequently tried to hide from investors the loss of this amount through a loan from its affiliate Tether. This was the reason for the initiation of an investigation and trial between the New York prosecutor’s office and Bitfinex, Tether and their operator iFinex.
On 24 October, Crypto Capital president Ivan Manuel Molina Lee was extradited from Greece to Poland and handed over to the Polish authorities accusing him of laundering money, including that of Colombian drug cartels, through cryptocurrency. Lee is accused of laundering 1.5 billion zlotys ($390 million).
According to Bitfinex, the cryptocurrency exchange itself is a victim of fraudulent actions by Crypto Capital.
“Crypto Capital processed certain funds for and on behalf of Bitfinex for several years,” Stuart Hoegner, General Counsel to Bitfinex said, in a statement. “During that period, Bitfinex relied upon various systematic representations from Crypto Capital, including from Molina and Yosef, that proved to be false.”
Earlier, New York City prosecutors charged fraud and running unlicensed money-transmitting business to Reginald Fowler, an Arizona businessman, and Ravid Joseph from Israel, allegedly a relative of Oz Josef. They are both suspected of having ties to Crypto Capital.