Cryptocurrency exchange Bitfinex is being targeted by the New York Attorney General’s Office and, additionally, investors, over $850 million in assets that suddenly went missing. The company was forced to receive a loan, and other considerations, from Tether because of the loss, leading to questions regarding how it is managing its operations. Bitfinex has argued that the lost money is somewhere under the control of a former payments process, Crypto Capital, and wants the courts to give it the ability to try to track down where those funds are currently located. The courts have now given their permission.
According to Decrypt, Bitfinex was granted a subpoena to dig into Crypto Capital and determine where at least some of the money is. Panama-based Crypto Capital has had issues of its own, with its founders and top executives arrested for alleged drug smuggling and money laundering. The company has stated that it cannot distribute the funds it had been holding for Bitfinex because its accounts have been frozen; however, Bitfinex successfully argued that the firm had already distributed money across a number of bank accounts to avoid detection.
Bitfinex General Counsel Stuart Hoegner told Decrypt, “We are pleased that the court has granted our application and we look forward to receiving information and materials that can aid our international recovery efforts.”
With the subpoena, Bitfinex will be able to dig into Crypto Capital’s records and obtain documents from the former VP of TCA Investment Bancorp and Trust Company, Rondell “Rhon” Clyde Monroe. TCA reportedly holds over $306 million of Bitfinex’s money through a bank it owns, Global Trading Solutions.
In issuing the subpoena, the courts explained, “[Bitfinex alleges] that the requested records will help ‘demonstrate [Applicant’s] ownership of, and entitlement to, the various funds…by helping Applicant trace the funds between and among various banks’ that Crypto Capital used.”
Crypto Capital reportedly was involved with another crypto exchange that has had to deal with its own nightmares. According to paper trails, QuadrigaCX, the Canadian exchange that lost $190 million in crypto when its founder and CEO, George Cotten, suddenly died, had a large sum of money held by the bank, as well.
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