Crypto Capital becomes a common thread for Bitfinex, QuadrigaCX
Some of the biggest crypto stories this year are starting to show a common thread. Breakermag reports that Bitfinex and QuadrigaCX both may have had their troubles started by, or worsened, through their relationship with payment processor Crypto Capital.
Revealed by a New York filing by the New York Attorney General, a Bitfinex executive showed concern that funds tied up with Crypto Capital were not being released for the exchange to use for withdrawals. The processor claimed that as much as $851 million had been seized by Portugal, Poland and the United States.
Although there’s evidence to support Crypto Capital’s defense, notably a Polish report of funds seized from the processor, Bitfinex didn’t believe it. The filing says they “grew concerned that Crypto Capital’s principals may be engaged in a fraud.”
What’s the link to failed exchange QuadrigaCX? That company also experienced withdrawal troubles before news broke of the death of their co-founder Gerald Cotten. Although not implicated in the QuadrigaCX case up till now, Crypto Capital was also one of their payment processors.
Adding to the possibility that Crypto Capital was the common connection, Coinapult, another exchange that uses the processor, also experienced withdrawal issues in December 2018. Cex.io also told customers that it was having problems “due to unsatisfactory provision of payment provider services.”
This doesn’t absolve the two exchanges of potential wrongdoing. There’s plenty of evidence that Bitfinex knew they were in financial trouble and were acting to hide it from their customers and authorities. And the amount of fishy stories surrounding the QuadrigaCX case are too numerous to name here, but there’s evidence to suggest that both Cotten and co-founder Michael Patryn might have been more nefarious than they once seemed.
Details about Crypto Capital haven’t come up much in the QuadrigaCX story so far, but as the New York AG digs deeper into the facts of the Bitfinex case, we’re likely to find out much more about exactly where their money troubles started. Considering the amount of coincidental problems that are already popping up around the processor, it’s likely not the last we’ve heard about them.
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