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   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 effectively relevant with real-time pricing.Depending upon where you reside, an exchange may be referred to as a bourse or a share exchange while, as a whole, exchanges are present within the majority of countries. Who is Listed on an Exchange?As trading continues to transition more to electronic exchanges, transactions become more dispersed through varying exchanges. This in turn has caused a surge in the implementation of trading algorithms and high-frequency trading applications. In order for a company to be listed on a stock exchange for example, a company must divulge information such as minimum capital requirements, audited earnings reports, and financial reports.Not all exchanges are created equally, with some outperforming other exchanges significantly. The most high-profile exchanges to date include the New York Stock Exchange (NYSE), the Tokyo Stock Exchange (TSE), the London Stock Exchange (LSE), and the Nasdaq. Outside of trading, a stock exchange may be used by companies aiming to raise capital, this is most commonly seen in the form of initial public offerings (IPOs).Exchanges can now handle other asset classes, given the rise of cryptocurrencies as a more popularized form of trading. 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 effectively relevant with real-time pricing.Depending upon where you reside, an exchange may be referred to as a bourse or a share exchange while, as a whole, exchanges are present within the majority of countries. Who is Listed on an Exchange?As trading continues to transition more to electronic exchanges, transactions become more dispersed through varying exchanges. This in turn has caused a surge in the implementation of trading algorithms and high-frequency trading applications. In order for a company to be listed on a stock exchange for example, a company must divulge information such as minimum capital requirements, audited earnings reports, and financial reports.Not all exchanges are created equally, with some outperforming other exchanges significantly. The most high-profile exchanges to date include the New York Stock Exchange (NYSE), the Tokyo Stock Exchange (TSE), the London Stock Exchange (LSE), and the Nasdaq. Outside of trading, a stock exchange may be used by companies aiming to raise capital, this is most commonly seen in the form of initial public offerings (IPOs).Exchanges can now handle other asset classes, given the rise of cryptocurrencies as a more popularized form of trading. Read this Term 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.)

This https://t.co/BihRzSlqAv

— 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  Stablecoin Unlike other cryptocurrencies like Bitcoin and Ethereum, stablecoins are cryptocurrencies that have been designed to keep a stable value. Placing a greater emphasis on stability over volatility can be a huge draw for some investors. Many individuals can be turned off from large swings and uncertainty presented by cryptos relative to other traditional assets.Stablecoins control for this volatility by being pegged to another cryptocurrency, fiat money, or to exchange-traded commodities, including gold, silver, or others. Advantages of StablecoinsOf note, stablecoins redeemable in currency, commodities, or fiat money are also said to be backed, whereas those tied to an algorithm are not considered to be so.There are several advantages of asset backed crypto. First, these coins are stabilized by assets that fluctuate outside of the crypto space, that is. This can help mitigate the financial risk associated with these assets.For example, Bitcoin and altcoins are highly correlated, so that cryptocurrency holders cannot escape periodic price falls. Stablecoins control for this vulnerability, allowing for the diversification of risk in a portfolio.Stablecoins also possess a mechanism for redeeming the asset backing them. This grants an additional level of confidence associated with the coin and are unlikely to drop below the value of the underlying physical asset, due to the effects such as arbitrage.For example, fiat-pegged coins are coins that are tied to a specified amount of fiat currency, usually on a one-to-one ratio (i.e.1 StablecoinX = $1). The companies that issue these currencies must have fiat reserves in the equivalent amount of the stablecoins they have issued.Crypto-pegged stablecoins constitute coins that are tied to a specified amount of another cryptocurrency, such as Bitcoin or Ethereum. Algorithmic stablecoins use supply-and-demand to automatically maintain a stable value. Unlike other cryptocurrencies like Bitcoin and Ethereum, stablecoins are cryptocurrencies that have been designed to keep a stable value. Placing a greater emphasis on stability over volatility can be a huge draw for some investors. Many individuals can be turned off from large swings and uncertainty presented by cryptos relative to other traditional assets.Stablecoins control for this volatility by being pegged to another cryptocurrency, fiat money, or to exchange-traded commodities, including gold, silver, or others. Advantages of StablecoinsOf note, stablecoins redeemable in currency, commodities, or fiat money are also said to be backed, whereas those tied to an algorithm are not considered to be so.There are several advantages of asset backed crypto. First, these coins are stabilized by assets that fluctuate outside of the crypto space, that is. This can help mitigate the financial risk associated with these assets.For example, Bitcoin and altcoins are highly correlated, so that cryptocurrency holders cannot escape periodic price falls. Stablecoins control for this vulnerability, allowing for the diversification of risk in a portfolio.Stablecoins also possess a mechanism for redeeming the asset backing them. This grants an additional level of confidence associated with the coin and are unlikely to drop below the value of the underlying physical asset, due to the effects such as arbitrage.For example, fiat-pegged coins are coins that are tied to a specified amount of fiat currency, usually on a one-to-one ratio (i.e.1 StablecoinX = $1). The companies that issue these currencies must have fiat reserves in the equivalent amount of the stablecoins they have issued.Crypto-pegged stablecoins constitute coins that are tied to a specified amount of another cryptocurrency, such as Bitcoin or Ethereum. Algorithmic stablecoins use supply-and-demand to automatically maintain a stable value. Read this Term 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.

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