Bitfinex files to recover $880 million

Bitfinex has filed to recover its $880 million frozen in different bank accounts. It believes a former banking executive has access to valid information to prove this.

October 21, 2019, | AtoZ MarketsCryptocurrency exchange Bitfinex’s parent company iFinex Inc. filed an application for discovery in a Southern California court. Discovery is a law allowing each party to obtain evidence from the other party or parties through the law of civil procedure before the actual trial.

The filing done on October 18, 2019, is related to $880 million in allegedly frozen funds held in bank accounts in Poland, Portugal, the United Kingdom, and the United States.

Bitfinex attempts to recover $880 million funds

Bitfinex requests a subpoena to take a deposition of Rondell “Rhon” Clyde Monroe, a former vice president of TCA Bancorp. The application by iFinex also seeks to obtain documentation of Monroe’s communication with Crypto Capital staffers.

Bitfinex alleges that Crypto Capital used one or more accounts at TCA Bancorp to facilitate the transfer of the exchange’s funds. Hence, Bitfinex believes that Monroe has information and documents that will help claim the hundreds of millions of dollars.

According to Bitfinex, Monroe and TCA Bancorp are in possession of $306 million of Bitfinex funds via a UK entity, G.T.S. Resources Limited (aka Spiral Global Development Limited), which is wholly owned by Reginald Fowler.

In the filing, Bitfinex claims that it was unaware of Crypto Capital’s relationship with Fowler until December 2018. Fowler is currently the subject of a fraud investigation by the U.S. Attorney’s Office. Crypto Capital allegedly represents that a further $355 million in Bitfinex funds are held in accounts at Bank Spoldzielczy in Poland. Meanwhile, $218 million is being held at 3 banks in Portugal, all of which amounts to $880 million.

As part of the discovery application, Bitfinex requests information on alleged ownership and account usage by Crypto Capital at a number of U.S. banks, including HSBC, Citibank, Bank of America, Sun Trust, TD Bank, US Bank, Wells Fargo and more. This information is meant to establish a link between Bitfinex and the funds being held in Poland, Portugal and the UK.

Bitfinex still under investigation in NYAG case

Bitfinex is also currently being investigated by the New York Attorney General’s Office based on claims that the exchange used a $850 million loan from stablecoin issuer Tether, the exchange’s sister company, to cover up losses.

Bitfinex and Tether, which are both operated by iFinex Inc., attempted to bring the NYAG’s proceedings to a halt in August by filing a lack-of-jurisdiction claim. The claim was denied.

At the moment, it remains unknown if Bitfinex’s attempts to subpoena Monroe are linked to the NYAG case.

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