Crypto Economy reported on Friday, October 25, that the CEO of Crypto Capital Co. Ivan Manuel Molina Lee had arrested by Polish authorities. He was accused of being a member of a Columbian Drug Cartel. According to polish authorities, he was also involved in running money laundering operations for this drug cartel using a cryptocurrency exchange, Bitfinex.
Polish prosecutor alleged that that Crypto Capital held accounts in Bank Spółdzielczy in the town of Skierniewice and that Molina Lee and Bitfinex laundered illegal proceeds through the country. The reported laundered money was up to 1.5 billion zloty or about $390 million.
But in a blog post, Bitfinex responding to this arrest, said that the exchange was a victim of fraud. The exchange said that any allegation that Crypto Capital, which is a former Bitfinex’s payment processor, laundered any illicit funds upon request of Bitfinex is categorically wrong.
The exchange, in its blog post, said:
“Bitfinex is the victim of a fraud and is making its position clear to the relevant authorities, including those in Poland and the United States. We cannot speak about Crypto Capital’s other clients, but any suggestion that Crypto Capital laundered drug proceeds or any other illicit funds at the behest of Bitfinex or its customers is categorically false. This week’s developments do nothing to affect or otherwise deter Bitfinex’s claims to funds in Poland or anywhere else. We will continue to work to recover all funds for and on behalf of our stakeholders.”
According to Bitfinex, Crypto Capital processed certain funds for and on behalf of Bitfinex for several years. The Bitfinex noted that it was relying upon representations from Crypto Capital, including those by Molina Lee and another exec Oz Yosef or Joseph, which eventually turned out to be misleading.
The story of dispute between Bitfinex and Crypto Capital is not new. On October 18, Bitfinex’s parent company IFinex filed a discovery application in the Southern California district court to regain its over $880 million in funds tied to Crypto Capital. In the application, Bitfinex claimed that it was unable access its funds that were processed by Crypto Capital.
The exchange further said that Crypto Capital did not simply keep the fund of Bitfinex’s clients. Instead, it transferred the funds to multiple banks in Poland, Portugal, the United Kingdom, and the U.S.