Bitstamp Wants to Subpoena Citibank, Bank of America

Bitstamp is seeking permission from the US District Court for the Southern District of New York to subpoena two banking giants, Citibank and Bank of America, in connection with a legal dispute between the European crypto Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term and its payment processor.

As reported by The Block, Bitstamp hired CNG Processing to facilitate its domestic and international payment transfers. However, the crypto exchange accused the Danish firm of violating the original terms of their business agreements that are hampering the withdrawal process.

The exchange is claiming that CNG delayed the opening of bank accounts in the United States and additionally put deposit and withdrawal limits. The names of the two Wall Street lenders were dragged into the dispute as the payment processor was opening the accounts with them.

Millions at Stake

The crypto exchange has already terminated its deal with the payment processor. It is now demanding a refund of the security deposit of $1.7 million, along with another $1 million in client deposits.

The submitted court documents show that CNG is denying to return any amount to the crypto exchange, saying that the two American lenders froze their relevant bank accounts.

“CNG has offered no documents from either Bank of America or Citibank to support its claims regarding the status of these accounts,” the court filing stated.

“Discovery that sheds light on the accuracy and veracity of CNG's claims regarding relevant Citibank and Bank of America accounts is crucial to the ongoing controversy between CNG and Bitstamp in Danish Courts.”

“Bitstamp is unable to comment on ongoing legal proceedings. We can assure our customers that the proceedings have no impact on our business,” the exchange said.

Meanwhile, many clients of Bitstamp are facing glitches in withdrawals for a couple of weeks and the exchange also acknowledged that the issue was due to its ill relationship with the payment processor.

The matter relates to a former partner of Bitstamp and we have not used their services in over a year. We're unable to comment on ongoing legal proceedings, however we can categorically state that we are processing fiat withdrawals.

— Bitstamp (@Bitstamp) November 17, 2020