Last week, Bitfinex was accused by the New York Attorney General of hiding losses amounting to $850M with its stablecoin, Tether (USDT). In a strange turn of events, the money allegedly ‘lost’ by the Panamanian firm Crypto Capital has been linked to ex-NFL team owner Reginald Fowler.
The Bitfinex scandal just keeps getting stranger. It has been reported by Bloomberg that Reginald Fowler, a 60-year old American businessman who once had a stake in the NFL’s Minnesota Vikings, has been indicted in the case against the exchange. Fowler, along with an Israeli woman named Ravid Yosef, is being charged with running an unlicensed money laundering operation tied to the cryptocurrency exchange.
Fowler is charged with illegally running Global Trading Solutions LLC which has been linked to Crypto Capital, the Panamanian firm responsible for Bitfinex’s missing $850M. Money in bank accounts owned by both Fowler and Global Trading Solutions have been seized as per the indictment.
Both Fowler and Yosef have been charged with one count of bank fraud and one count of conspiracy to commit bank fraud. Fowler has been arrested, while Yosef still remains at large.
According to the indictment, Bitfinex was allegedly using Global Trading Solutions’ private HSBC bank account to move funds — but that’s just the tip of the iceberg. Fowler and Yosef allegedly ran a shadow bank which processed hundreds of millions of dollars worth of unregulated transactions for various cryptocurrency exchanges. They were able to do so by faking transactional volume and a concerted campaign of lies and deceit.
The transactions were said to be ‘real estate investments’ and were fraudulently reported as such on wire transfers. Neither Fowler nor any of the cryptocurrency companies and exchanges were licensed as money-transmitting businesses, which is required by law. It’s still uncertain how much of the $850M passed through Fowler and Yosef’s fraudulent firms.
Fowler’s Global Trading Solutions was allegedly both receiving and sending money on behalf of crypto companies. Working with dozens of individuals, millions were wired into these accounts and sent to various companies and individuals. The paper trail shows that many other individuals and exchanges have yet to be brought to light, so it is likely that these fresh indictments are just the beginning.
Fowler is a former investor in the NFL Minnesota Vikings and the Alliance of American Football. The indictment is the first time the businessman has been formally connected to the cryptocurrency world.
Do you believe more indictments will come as this case continues to grow? Let us know your thoughts in the comments below.