- Bitfinex’s parent company filed the discovery application to the US District Court for Central Southern California
- Crypto Capital has approximately $880 million of Bitfinex funds frozen in its account by Polish, Portuguese, UK, and US regulatory authorities in connection to money-laundering investigations
- Bitfinex wants the court to subpoena the testimony of a former Vice President of its payment’s processor, Global Trade solutions also known as Crypto capital
On October 18, 2019, Bitfinex applied to the US Court in California to subpoena the former vice president of the TCA Bancorp trust company. His testimony is believed that it can help to recover $880 million in frozen funds that were entrusted to its payment processor, Crypto Capital.
ifinex Inc., Bitfinex’s parent company, filed the discovery application to the US Court in the Southern District of California. The Exchange is seeking permission from the court to access the deposition testimony of Rondell Clyde Monroe and other documents that will prove his communication with the staff of Crypto Capital.
In the filing, Bitfinex stated that Crypto Capital used TCA Bancorp accounts to facilitate funds transfer. The Exchange believes that the former vice president has documents that could prove their claims are valid.
Bitfinex’s Subpoena Application
The exchange said in their filing that they had a good business relationship with crypto capital until April 2018. However, that changed after Polish authorities froze Crypto Capital’s funds in connection to money laundering activities:
“Since 2014, but primarily in 2017-2018, Crypto Capital provided services as a payment processor to Applicant, transferring funds to and fro applicant and its customers.”
Bitfinex said that Crypto Capital told them that regulatory authorities in Poland and Portugal had seized approximately $500 million of their funds:
“Since no later than December 3018 however, Crypto Capital has failed and refused to remit funds claiming that its bank accounts located in Poland, Portugal, the United Kingdom, and the United States have been seized or frozen by various governmental authorities in each jurisdiction.”
Proof Is In the Reference Letter
Crypto Capital then provided a reference letter from TCA signed by the then vice president Monroe, after Bitfinex pressurized them to provide more information about the frozen accounts.
The letter indicated that a customer known as Global Trade Solutions AG (GTS), doing business as Crypto Capital, had $300 million Bitfinex funds held for them by TCA.
Bitfinex is requesting the court to allow them to use Monroe’s deposition testimony and documents showing his communication with a principal at Crypto Capital Ozzie Yosef. Ozzie is part of the individuals at Crypto Capital, who Bitfinex claims were involved with its accounts.
Bitfinex Alternate Source of Funding
The news follows investigations into Bitfinex by the New York Attorney General’s Office, who are accusing the Bifinex of failing to disclose news of the frozen funds to their customers. Instead, Bitfinex allegedly used a loan from Tether, its sister company, to cover the funds. The document stated:
“As described by counsel, Bitfinex would take a ‘line of credit’ of $600 to $700 million on the reserve funds backing tethers. Counsel did not suggest what if any. The benefit would accrue to Tether or holders of tethers, from this transaction. Nor did counsel suggest that this transaction would be disclosed to the public, including investors trading on the Bitfinex platform or holders of Tether.”