On October 23, the Southern District of New York’s US Attorney’s office formally charged Oz Yozef, principal of payment processor Crypto Capital, with three criminal counts — bank fraud, conspiracy to commit bank fraud and conspiracy to operate an unlicensed fund transfer business. The indictment of Yozef confirmed the allegations filed by Stuart Hoegner, the general counsel of crypto exchange Bitfinex.
According to court documents that remain undisclosed to the public, Yosef texted an anonymous source about a fund transfer worth $10 million. The fund would come from a Manhattan-maintained bank account and would be sent to another bank in the Bahamas.
The relationship between Bitfinex and Crypto Capital began to turn sour when US authorities and other international regulatory bodies suspected that the payment processor was involved in criminal activities. As a result, the funds held by Crypto Capital had been frozen and seized. Notably, around $880 million of the funds belong to Bitfinex. Allegedly, in an attempt to cover-up for the loss, the crypto exchange turned to Tether for help. The sister company loaned its reserves without its clients’ approval, the reason why both firms are currently facing a legal battle with the New York Attorney General’s office.
Meanwhile, Ivan Manuel Molina Lee, the president of Crypto Capital, was arrested in Greece last week. He was extradited by Polish authorities in Warsaw and would face money laundering charges worth 1.5 billion zloty ($390 million).
Hoegner’s letter to the US court was submitted a day after Lee’s arrest. Notably, Bitfinex seeks to be declared as a victim of the circumstances. Furthermore, the crypto exchange wrote that it would clear its position to US and Polish authorities and would continue pursuing the lost funds.