Since April 2019, the case of Crypto Capital Corp “(CCC”) crypto payment scheme is before the courts in Europe and North America. These court cases evidently provide a not-so-nice picture of the early crypto scene. The CCC came into public attention through the alleged loss of $850 million from the then leading crypto exchange Bitfinex. In a lawsuit, Bitfinex claims that this missing $850 million was stolen by CCC and its people. Most notably, the US American Reginald Fowler and his two alleged Israeli accomplices Ravid Yosef and her brother Oz Yosef.
But not only Bitfinex funds are said to have disappeared via the illegal CCC payment scheme. In the UK, The Telegraph now reports that in the scandal surrounding the bankrupt Canadian crypto stock exchange QuadrigaCX, funds are also said to have disappeared via the CCC. In addition, funds from a Colombian drug cartel allegedly have been laundered through the CCC scheme.
In the US, charges have been brought against Reginald Fowler, Rahiv Yosef, and Oz Yosef and their frontman Ivan Manuel Molina Lee. The trial of the missing hundreds of millions is underway. While Reginald Fowler was initially arrested and later released on $5 million bail pending trial, the Yosef siblings remain at large.
The US citizen Reginald “Reggie” Fowler, born 1959, and his partners, the Israeli woman Ravid Yosef, born 1982, and her brother Oz Yosef were indicted in 2019 by the U.S. prosecutors for bank fraud and operating an unlicensed money transmitting business. Allegedly, they ran a shadow banking service called Crypto Capital Corp (“CCC”). According to the US Attorney’s Office for the Southern District of New York (SDNY), the three were part of an illegal payment scheme that involved using hundreds of bank accounts to funnel money from and to several crypto exchanges.
Reginald Fowler and Ravid Yosef allegedly ran a shadow bank that processed hundreds of millions of dollars of unregulated transactions on behalf of numerous cryptocurrency exchanges. Their organization allegedly skirted the anti-money laundering safeguards required of licensed institutions that ensure the U.S. financial system is not used for criminal purposes, and did so through lies and deceit.U.S. Attorney Geoffrey Berman
Crypto Capital and Havelock Investments
Allegedly, Crypto Capital Corp (“CCC“) and its platform www.cryptocapital.co were set up in 2013 as in Panama (back then known as Crypto Financial) as a payment scheme ran by crypto people for the crypto industry (“Crypto Capital is a Fiat Payment Platform build to support the Crypto Currency Payment Platform“) Ivan Manuel Molina Lee (“Ivan Molina“) was registered as a nominee director according to OpenCorporates.
According to Decrypt, CCC did an IPO in August 2013 and raised 30,000 Bitcoin (back then equivalent to some $300,000) via the Havelock Investments platform then operated by Panama Funds S.A., a Panama-based financial services company specialized in the crypto industry. It turned out, however, that the people behind CCC and Panama Funds d/b/a Havelock Investments (www.havelockinvestments.com) have been part of the very same network. The Havelock Investments platform actually facilitated a range of other crypto ventures with their capital services and became a big name in the crypto industry.
CCC was later sold to Switzerland-based Global Trade Solutions AG (“GTS”), a director of which is also Ivan Molina. Allegedly, Molina acts as s nominee director and trustee for the Israeli citizen Oz Yosef and his sister Ravid Yosef. This hypothesis is confirmed with a look into the OpenCorporate database. There Ivan Molina appears in connection with more than two dozens companies, which are very often connected with the crypto industry.
The Billion-Dollar Crypto Capital Scheme
While Reggie Fowler is evidently seen as the principal of the illegal Crypto Capital Corp (CCC) payment processing scheme, Yosef and his sister Ravid, allegedly assisted Fowler. According to prosecutors, the trio set up hundreds of bank accounts to funnel money into different crypto exchanges. They allegedly lied to banks to open accounts in order to bypass anti-money laundering (AML) regulations. The US indictment presents a list of bank accounts at HSBC, for example, which were operated either in name of Global Trading Solutions LLC or directly in Fowler’s name. The US Government seized the funds on these bank accounts.
According to Decrypt CCC acted as a sort of “central bank of the crypto industry”. It facilitated banking services for major crypto businesses and exchanges including Binance, Kraken, BitMEX, or the collapsed Canadian QuadrigaCX. In these early days of the emerging crypto industry, CCC provided banking services to crypto companies when the established financial industry denied them access to bank accounts. Consequently, CCC quickly emerged as a prime address for crypto businesses worldwide.
The US prosecutors claim that Fowler and his CCC scheme moved a staggering amount of money – $740m in 2018 alone. In the summer of that year, prosecutors allege, he sent “approximately $60m from scheme accounts to his personal bank accounts”.
The BitFinex Heist
In October 2019, the crypto exchange BitFinex claimed that it was defrauded by CCC and allegedly lost $850 million. Bitfinex has said it entrusted CCC with more than $1 billion.
In or about late August 2018, however, Crypto Capital began representing that approximately $500 million of Applicant’s funds in both Poland and Portugal were being ‘held up’ by regulators in both countries. From then through November 2018, one of CryptoCapital’s principals, Oz ‘Joseph,’ repeatedly reassured Applicant that its funds held in Poland and Portugal were on the verge of being released and that Crypto Capital was working diligently with local authorities to secure their release.BitFinex lawsuit filed by parent company iFinex
In their lawsuit, Bitfinex and its parent company iFinex claimed that G.T.S. Resources Ltd, a UK-registered company, alone held more than $304 million.
G.T.S. Resources Limited, a United Kingdom entity that, according to Crypto Capital, is currently holding more than $304,000,000 of iFinex’s funds with TCA Investment Bancorp & Trust. G.T.S. Resources Limited is also wholly owned by Mr. Fowler.BitFinex lawsuit filed by parent company iFinex
According to the UK Companies House, Fowler is actually controlling G.T.S. Resources Ltd which has been renamed into Spiral Global Development Ltd.
The QuadrigaCX story
In January t2020, lawyers for the collapsed Canadian crypto exchange QuadrigaCX claimed a relationship between QuadrigaCX and Fowler’s CCC. They claim that some of QuadrigaCX’s lost funds may sit in bank accounts with the HSBC Bank in London.
The US Government says that Fowler, CCC and bank accounts related to their banking scheme hold $345m. Only $50m of that is held in the United States with the rest located abroad. Some of this money may be in bank accounts in London The Telegraph assumes in an article published on March 16, 2020.
The Colombian drug cartel
In April 2018, Polish authorities seized some €400 million on a bank account held at Bank Spoldzielczy in Skierniewice, Poland. CCC used that account for Bitfinex’s euro deposits but according to prosecutors, that same account was used to launder money for a Colombian drug cartel.
Lawsuits, indictments, and arrests
Fowler was arrested in Arizona on April 30, 2019, and released on $5 million bail. He was charged with four counts related to bank fraud and running an unlicensed money-transmitting operation. In January 2020, an almost-done plea deal with the prosecutors fell apart on financial issues. Fowler was supposed to plead guilty to the operation of an unlicensed money transmitting business and agrees to forfeit $371 million in more than 50 bank accounts with prosecutors agreeing to drop the other three. Fowler, however, would only agree to forfeit whatever was in the accounts, and prosecutors gave that a no-go. Instead, the prosecutors added a fifth count – the catchall Wire Fraud (read Matt’s court report here on Patreon).
A trial has been scheduled for January 2021. The question still is where the hundreds of millions of dollars on Fowlers and/or CCC bank accounts currently are and whether all bank accounts have been identified by law enforcement in the different jurisdictions. Evidently, quite a significant amount of these millions may have been stolen from Binfinex and QuadrigaCX. What about the drug money?
Also in April 2019, New York Attorney General Letitia James filed a suit accusing cryptocurrency exchange Bitfinex of using the reserves of an affiliated company to cover up a loss of $850 million. Bitfinex had been unable to obtain a normal banking relationship. Hence it worked with CCC and deposited over $1 billion with this unregistered payment processor. Allegedly, no contract was ever signed with CCC. James alleged that in 2018 Bitfinex knew or suspected that CCC had absconded with the money, but that their investors were never informed of the loss.
Ivan Molina Lee
In October 2019, the indictment against Ivan Manuel Molina Lee, the president of Crypto Capital Corp (CCC), was unsealed and he was arrested (read this interesting Modern Consensus). Currently, we are not aware of any scheduled trial.