U.S. attorneys are requesting that the court incarcerate a Bitfinex banker for alleged wrongdoings and seize more than $700 million from them.
According to Bloomberg, a suspected banker involved with the defunct QuadrigaCX, Bitfinex, BitMEX, and Kraken cryptocurrency exchanges may face up to seven years in jail and have over $740 million seized by the U.S. Attorney’s Office.
Reginald Fowler, a former owner of the Minnesota Vikings soccer team, is being sought by the U.S. authorities for using cryptocurrency trading to undertake money transfers in violation of anti-money laundering laws.
According to the accusations made by the prosecution, Fowler’s business, Global Trading Solutions, and its subsidiary Crypto Capital, offered financial services to cryptocurrency exchanges without following the rules set down by the banking industry. The prosecution further claims that in 2018, Bitfinex exclusively employed HSBC’s services through Global Trading Solutions, and over $750 million moved through the firms between February and October of that year.
Fowler was charged with bank fraud in April 2019 and initially entered a not guilty plea, but in April 2022, changed his plea. The court is scheduled to rule on April 11th, 2023. The operator of Crypto Capital was detained in Poland in 2019 on charges of participating in money laundering and a global narcotics cartel.
Even in 2023, banks remain a significant vulnerability for many crypto exchanges. For example, Binance.US, the U.S. division of Binance, has been unable to secure a new partner since numerous U.S. banks failed in March 2023. The exchange is reportedly storing consumers’ funds with banks affiliated with fintech company Prime Trust, according to The Wall Street Journal.
The Commodity Futures Trading Commission previously filed a lawsuit against the foreign version of Binance (CFTC). The regulator alleges that Binance advised VIP customers on ways to avoid regulatory supervision and offered futures trading to Americans since July 2019.