Published: 26.04.2022
Article reading time:
2 minutes.
The co-founder and operator of Crypto Capital, a company that provided crypto firms with access to banking services, pleaded guilty to multiple cases of fraud.
Court documents say Reginald Fowler pleads guilty to bank fraud, conspiracy with banks, operating an unlicensed money transfer business, conspiring to operate an unlicensed money transfer business, and wire fraud. The verdict for the former Crypto Capital operator will be announced in August this year.
Crypto Capital was founded in 2013 and registered in Panama. She was engaged in providing access to crypto-currency companies to banking services – at that time a very small number of banks worked with such firms. But, according to American law enforcement agencies, acting as a “layer” between banks and cryptocurrency companies, Crypto Capital allowed them to bypass regulatory requirements to combat money laundering.
Fowler and another operator of the company, Ravid Yosef, were found to have about 60 bank accounts, totaling $345 million, according to U.S. prosecutors.
The firm’s clients were the cryptocurrency exchanges Kraken, Binance and QuadrigaCX, and the largest client was the Bitfinex platform. In October 2018, the exchange was unable to access $850 million that was temporarily held by Crypto Capital. To cover the loss, Bitfinex had to “borrow” funds from the stablecoin operator Tether. After that, the US authorities launched an investigation and the companies had to pay $18.5 million in fines to resolve the situation.
Source: Bits
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