Bitfinex Calls Itself 'Victim of a Fraud' in Response to Recent Arrest

Major global crypto exchange Bitfinex has called itself a “victim of a fraud” in response to the recent arrest of the president of Crypto Capital exchange.

Bitfinex will continue to recover lost funds

Following the arrest report on Oct. 24, Cointelegraph received a response statement from Stuart Hoegner, Bitfinex's general counsel, on Oct. 25. The statement seeks to establish the company as a “victim of fraud” and to deny potential accusations of illegal activity by Bitfinex.

In the statement, Bitfinex claimed that any allegation that Crypto Capital, which is a former Bitfinex’s payment processor, laundered any illicit funds upon request of Bitfinex or its customers is “categorically false.” The exchange wrote:

“This week's developments do nothing to affect or otherwise deter Bitfinex's claims to funds in Poland or anywhere else. We will continue to work to recover all funds for and on behalf of our stakeholders.”

The money laundering arrest

As reported, Ivan Manuel Molina Lee, the president of Crypto Capital was arrested by Polish authorities allegedly in relation to involvement in money laundering through cryptocurrencies for facilitating international drug cartels. Specifically, Molina Lee was reportedly detained on the basis of a European Arrest Warrant in connection to $350 million that were previously seized by the Polish Ministry of Justice. 

As a major crypto payment processor, Crypto Capital reportedly served industry-known crypto exchanges in the past, including Binance, Kraken, BitMEX as well as Bitfinex.

Bitfinex alleges that Crypto Capital was misleading the company for years

As previously reported, Crypto Capital is allegedly responsible for Bitfinex’s loss of $880 million. On Oct. 18, Bitfinex’s parent company IFinex filed a discovery application to regain access to over $880 million in funds tied to Crypto Capital, alleging that simply did not keep the fund of Bitfinex’s clients.

In the recent statement, Bitfinex noted that Crypto Capital processed certain funds for and on behalf of Bitfinex for several years. The exchange elaborated that at the time, Bitfinex was relying upon representations from Crypto Capital, including those by Molina Lee and another exec Oz Yosef (Oz Joseph), which eventually turned out to be misleading. Bitfinex said:

“Among those misrepresentations, Crypto Capital regularly referred to its integrity, banking expertise, robust compliance programme and financial licences. This was designed to assure us that Crypto Capital was capable of handling Bitfinex's transactions.”

Another principal, Oz Yosef, has reportedly been indicted on three criminal counts by the United States Attorney for the Southern District of New York, according to Bitfinex.