Crypto Capital Corp is a licensed (in Panama (archive) [for one of the corporations]), unlicensed (My copy) (just about everywhere else) money transmitter and payment processor. They partnered with a variety of cryptocurrency companies including: Kraken, Bitfinex, Quadriga, Bitmex, Coinapault, and more. They are implicated in wire fraud, bank fraud, embezzlement, and hundreds of millions of dollars worth of money laundering for the Colombian cartels.
The reason Crypto Capital Corp matters to me is twofold: first, they appear to be an utterly fascinating fraud entirely on their own. Second, they are in part responsible for the insolvency of Tether and of Bitfinex.
Crypto Capital Corp was run by Reginald Fowler (the former part owner of the Minnesota Vikings), Oz Yosef, Ravid Yosef, and Ivan Manuel Molina Lee. It seems to have been a criminal enterprise for much of its existence.
A few of the crimes and other activities that Crypto Capital Corp allegedly participated in are:
- Claimed to be opening bank accounts for real estate transactions that were actually being used to process payments for cryptocurrency exchanges. (My copy)
- Running an unlicensed money transmitter. (My copy) Note: this claim is somewhat more complex than others, they do seem to have been licensed in Panama for at least one of the corporations that made up this enterprise. (archive) However, Reginald Fowler was prepared to plead guilty to operating an unlicensed money transmitting business. (My copy) However, he has not pled guilty. (My copy)
- Reginald Fowler would move funds from the accounts of Crypto Capital to his personal accounts, totallying tens of millions of dollars. (My copy) He referred to this as his ‘10% fund’ and it was documented in a book he referred to as his: “Master US Workbook”.
- Reginald Fowler agreed to cooperate in the investigation and keep it secret, then immediately shared it with his co-conspirators and ‘impeded’ the investigation. (My copy)
- Reginald Fowler would attempt to get bank accounts by presenting fraudulent bond certificates, allegedly for billions of dollars. (My copy)
- When Reginald Fowler was arrested he was in possession of thousands of dollars worth of counterfeit bills, and tools commonly used to create more. (My copy)
- Reginald Fowler allegedly used funds from his customers (cryptocurrency exchanges) to represent to the American Alliance of Football that he controlled more funds than he did, in order to obtain an ownership stake. (My copy)
- Ivan Manuel Molina Lee, the CEO of Crypto Capital was arrested on suspicion of laundering hundreds of millions of dollars for the Colombian cartels, specifically through Bitfinex. (Archive)
So why was Bitfinex and other exchanges using Crypto Capital Corp? The simple reason is that a large number of cryptocurrency business struggled with getting consistent banking, and because of this would rely on a number of third party payment processors in order to service their customers. Kraken at one point was using rented PayPal accounts. (Archive) Bitfinex would also use the accounts of employees and friends in order to service withdrawals. (My copy) This difficulty in obtaining banking incentivized many of these exchanges to partner with companies like Crypto Capital Corp.
Bitfinex started working with Crypto Capital Corp in 2014, but had to significantly increase their involvement starting in 2017 after they lost access to correspondent banking through Wells Fargo. Eventually, Bitfinex would allegedly give over $1,000,000,000 of commingled client and corporate funds to Crypto Capital Corp without a contract or agreement. (My copy) Tether would also hold an undisclosed amount of funds with Crypto Capital Corp as well.
Crypto Capital Corp would eventually stop responding to Bitfinex’s requests for withdrawals, and Bitfinex became effectively insolvent and unable to service customer withdrawals. Due to this they entered into a series of conflicted transactions with Tether that left Tether effectively insolvent. None of this was disclosed until the New York Attorney General investigation came out. Actually, Bitfinex outright lied to the public claiming that withdrawals were working fine. (My copy)
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