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December 2012

Bitfinex Denies Money Laundering as Crypto Capital President Arrested



Bitfinex has denied accusations of money laundering and claimed that it was a “victim of fraud” after the president of Crypto Capital was arrested in Greece yesterday.

Ivan Manuel Molina Lee was arrested in Greece and extradited to the Polish capital of Warsaw yesterday, where he has been charged with being part of an international drug cartel and money-laundering operation that allegedly siphoned funds between South America and Europe. Crypto Capital has been described as a “shadow bank” at the center of a fraud investigation into Bitfinex and its sister company Tether, both of which are controlled by parent company iFinex.

Missing Millions

The arrest comes just days after Bitfinex filed an application for discovery in an attempt to recover a “missing” $880 million USD held by Crypto Capital. The subpoena filing notes that Crypto Capital “provided services as a payment processor to [iFinex], transferring funds to and from [iFinex] and its customers,” since 2014. However, since December of last year, Crypto Capital has failed to remit the funds, claiming its bank accounts in PolandPortugal, the United Kingdom, and the United States had been seized or frozen by the various authorities.

In a statement today, Bitfinex has moved to distance itself from Crypto Capital, arguing that the exchange was a victim itself. Bitfinex says that any claims that Crypto Capital laundered funds on behalf of the exchange are “categorically false.” Further, in the statement, the exchange said that these developments will not deter it from recovering the missing $880 million USD.

>> Bakkt is All Set to Launch Options on Bitcoin Futures in December

More Controversy for Bitfinex

The arrest of Lee is an unusual turn of events in the ongoing controversy regarding Bitfinex and Tether. Both companies are accused of creating “the largest bubble in human history” in a lawsuit filed in New York last month, which claims the companies manipulated the crypto market out of $1.4 trillion USD. The suit’s allegations center around long-standing claims that Tether essentially printed billions of dollars worth of tokens to artificially inflate prices and convince investors that demand was far greater than in actuality.

It is difficult to judge just how aware Bitfinex was of the shady ongoings at Crypto Capital, or if the exchange will ever recover the missing millions, but it will be interesting to see how this develops over the coming weeks.

Featured Image: DepositPhotos © ezthaiphoto

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Bitfinex and Tether Lawsuit Revised After Plaintiffs Drop Action



Controversial cryptocurrency exchange Bitfinex and its sister stablecoin issuer Tether have had a lawsuit against them withdrawn by two plaintiffs and re-filed with the addition of a new plaintiff.

The two companies were accused of creating “the largest bubble in human history” in a lawsuit filed in New York in October, which alleged that Bitfinex and Tether manipulated the crypto market out of up to US$1.4 trillion. A second, similar case was then brought against the two companies by Eric Young and Adam Kutz, who claimed that Bitfinex and Tether “monopolized and conspired to monopolize the Bitcoin market,” as well attempting to manipulate the market and making inaccurate claims.

Both cases were built upon longstanding claims that Tether essentially printed billions of dollars worth of tokens to artificially inflate prices and convince the market that there was a far greater demand for cryptocurrencies than was the reality.

A document filed on Tuesday, January 7, in the US District Court for the Western District of Washington shows that both Young and Kutz agreed to the voluntary dismissal of their case against iFinex, the parent company of Bitfinex and Tether. The suit was refiled the following day with the addition of David Crystal as plaintiff. It is not yet known why Young and Kutz decided to refile the case, and US law states that cases which have been voluntarily dismissed can never be brought to court again if it is dismissed a second time.

Both companies are steadfast in their denial of the accusations, describing the claims thrown at them as “meritless and mercenary.” Stuart Hoegner, general counsel to Bitfinex, said that the refiled case was also baseless and “will be disposed of in due course.”

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Tether had emphasized that its coin is backed 1:1 with the US dollar but flip-flopped on this stance in February when under investigation by the Department of Justice, changing its position to say its reserves “from time to time may include other assets.” Tether then made another walk back from this claim in April, when one of its lawyers admitted in court that the USDT was actually only 74% backed by cash or cash equivalents.

Featured Image: DepositPhotos © ezthaiphoto

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Facebook Crypto Ad Ban | Platform Loosens Restriction on Crypto Ads

Facebook Crypto Ad Ban

Facebook Crypto Ad Ban

According to CNBC, Facebook said on Wednesday that it will loosen its ban on cryptocurrency advertising on its platform. The result will allow businesses related to crypto and blockchain to promote their projects on the social network. The Facebook crypto ad ban first came into effect in January 2018.

Facebook Crypto Ad Ban

The social media giant first started blocking ads on initial coin offerings, saying it had concerns for its users’ welfare. It was afraid that many would fall for scams and fraudulent crypto products.

But earlier this year its stance began to change. In January 2019, it began allowing ads from projects that had received prior written approval.

Was it coincidental that around the same time there were murmurs that Facebook itself was going to venture into the cryptocurrency space with its own coin?

Now, the social media giant has gone another step further, making it so that crypto-related ads will no longer require prior written approval.

In a blog post released yesterday the media giant said:

“We’ve listened to feedback and assessed the policy’s effectiveness […] While we will still require people to apply to run ads promoting cryptocurrency, starting today, we will narrow this policy to no longer require pre-approval for ads related to blockchain technology, industry news, education or events related to cryptocurrency.”

The company’s initial ban was met with ire from many businesses that felt the new policy was unfair. The restriction on advertising meant several projects lost hundreds of thousands of dollars because their ad campaigns were suddenly banned.

>> Bitcoin Price to Hit $7,200 After Demonstrating Bullish Signs?

It also is a convenient time for Facebook to change its opinion of cryptocurrency advertising as it is reportedly working on its own blockchain project.

According to several sources, the company is building its own stablecoin that will allow WhatsApp users to send cryptocurrency payments to one another. Further, last week it was reported that Facebook has been in talks with financial firms and e-commerce companies to support its project.

Are you happy to see the Facebook crypto ad ban reversed?

Featured Image: DepositPhotos © Kesu01

OneCoin Leader Arrested in New York



US prosecutors have arrested one leader of the OneCoin project for stealing billions from investors through the alleged pyramid scheme.

Ruja Ignatova and Konstantin Ignatov have been indicted by the State of New York for wire fraud, securities fraud, and money laundering. Ignatov was arrested this week, however, Ignatova remains at large.

The pair defrauded investors out of “billions of dollars” using fake cryptocurrency.


Prosecutors are calling the OneCoin project a pyramid scheme whereby members work on a commissions basis and try to recruit other members to the project. Each of these members, of which there are a purported 3 million worldwide, are required to buy a cryptocurrency package in order to join up for the scheme.

According to CoinDesk“OneCoin claims its tokens are mined by servers operated by the company and that its price growth is organic [however], neither of these are true, the release says.”

According to Attorney Geoffrey Berman, the two defendants promised big returns and minimal risk from their cryptocurrency company that was built on “lies and deceit.”

He furthered:

“They promised big returns and minimal risk, but, as alleged, this business was a pyramid scheme based on smoke and mirrors more than zeroes and ones. Investors were victimized while the defendants got rich.”

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Ignatova reportedly detailed in an email how she had an “exit strategy” from the project and will also face charges in India for the fraudulent scheme. Ignatova remains at large. The third leader of the project, Mark Scott, was arrested last year in Massachusetts.


The OneCoin project was highlighted as fraudulent since 2016. It has been globally recognized as a scam with nations across the globe warning users about it.

Have you fallen victim to a cryptocurrency scam? The market is volatile, and the risks of being scammed are high. What are your thoughts about the OneCoin project?

Featured Image: Deposit Photos © VitalikRadko

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