Ivan Manuel Molina Lee, the president of payment processing firm Crypto Capital, has been arrested by Polish police on accusations of money laundering and involvement with an international drug cartel. According to several local news sites, Molina Lee’s money-laundering activities involved the usage of cryptocurrency exchange Bitfinex.
Specifically, Polish media source RMF 24 reported that Molina Lee was originally sought after by Polish authorities for “laundering money from Colombian drug cartels through the cryptocurrency exchange.” (Translated quote.)
— EastMother (@EastMother) October 24, 2019
Crypto Capital, which was also used by the now-defunct QuadrigaCX, was allegedly entrusted with $850 million of Bitfinex’s money. Bitfinex has since alleged that it has not been able to access this money, and held a $1 billion token sale in May to help cover the loss after taking a loan from its sister company, stablecoin issuer Tether. The loan was made public as part of a court case that the New York Attorney General brought against both Bitfinex and Tether.
“The largest security [seizure] in the history of the Polish prosecutor’s office against forfeiture.”
The arrest is the latest event in a series of actions taken against a group of entities that are suspected to be connected with Molina Lee and Crypto Capital.
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This includes the seizure of several bank accounts worth $350 million by the Polish Ministry of Justice. The accounts were registered under the names “Crypto SP. Z O.O.” and “NESP SP. Z O.O.” The seizure of the accounts was reportedly part of an anti-money laundering initiative by the Ministry.
According to a report by The Block, the Polish National Public Prosecutor’s Office described seizure as “the largest security [seizure] in the history of the Polish prosecutor’s office against forfeiture.”
Bitfinex is attempting to prove that $850 million of its funds were frozen while in the care of Crypto Capital
Earlier this week, Bitfinex filed an application for discovery in order to subpoena a former banking executive as part of an effort to regain access to funds that were allegedly frozen while in the care of Crypto Capital.
Finance Magnates previously reported that in April of 2018, Bitfinex alleged that Crypto Capital originally informed that $500 million of its funds were being ‘held up’ by regulators in Poland and Portugal. The filing says that before that point, Bitfinex’s “relationship with crypto capital generally operated well.”
After Crypto Capital informed Bitifnex of the frozen funds, the filing says that “one of Crypto Capital’s principals, Oz ‘Joseph,’ repeatedly reassured [Bitfinex] that its funds held in Poland and Portugal were on the verge of being released and that Crypto Capital was working diligently with local authorities to secure their release.”
By December 2018, Bitfinex has evidence that Crypto Capital has lost control of an additional $304M. Ultimately, the seized and lost funds total $880 Millions. https://t.co/2C4GTTtEna
— EastMother (@EastMother) October 21, 2019