On Oct 18 cryptocurrency exchange Bitfinex, operated and owned by Hong Kong-headquartered iFinex Inc., filed for a discovery application at the US District Court for the Central District of Southern California in its quest to reclaim funds amounting to eight hundred and eighty million dollars ($880 million) assigned to cryptocurrency firm Global Trade Solutions AG, or Crypto Capital.
It appears that Bitfinex’s complex web of banking relationships has been a lasting talking point for two years, and for the payment processing firm Global Trade Solutions AG, this relation is turning out to be very costly.
Last month, the Swiss financial watchdog put the Bitfinex banking partner under scrutiny for its alleged association in a scam worth eight hundred and fifty million dollars ($850 million). It is also said to be related to Global Trading Solutions LLC, another financial services provider put under the US government radar. Following that, the funds were rendered inaccessible.
Cryptocurrency exchange Bitfinex looks for answers
Now, Bitfinex is requesting a full discovery, made under a federal law that permits discovery tools in non-US judicial proceedings. The request, if approved, would allow document production in foreign cases described therein.
Reportedly, Bitfinex lost access to $880 million in funds entrusted to Crypto Capital during the period 2017-2018 when the cryptocurrency exchange suffered a blow to its banking relations in Taiwan in the wake of US sanctions. Since Dec 2018, following the claim from payment processor regarding its frozen accounts in Poland, Portugal, the UK, and the US, Bitfinex has made frantic attempts to recover these lost funds by initiating legal proceedings in these countries.
According to Bitfinex, the payment processor allegedly used one or more accounts at TCA Bancorp to facilitate fund transfers for the exchange and subpoenaing Vice President of TCA Bancorp, Clyde Monroe, may reveal the answers it has been looking for and ultimately lead to regaining access to the millions of dollars of funds.
As a part of the discovery application, Bitfinex also seeks information of Crypto Capital’s alleged ownership of bank accounts at a number of US Banks, including HSBC, Citibank, Wells Fargo, and Bank of America, among others, which will help in establishing a link between the cryptocurrency exchange and its funds being held in Portugal, Poland and the UK.