Daily fraud update: 28th October

Chris Lee

Crypto Capital executive arrested over fraud claims

The principal of a beleaguered crypto payment processor has been taken into custody following claims that he was responsible for a series of criminal activities.

Oz Yosef was told by the United States Attorney for the Southern District of New York that he would face three criminal charges, including one of conspiracy to carry out banking fraud.

He was also told that he would face a charge of actually committing bank fraud, as well as one of conspiring to run an unlicensed money transmission firm.

The saga of Crypto Capital, which is located in Panama, has been long-running.

It has been accused of managing to lose its jurisdiction over a sum of cryptocurrency equal to $850m owned by the similarly beleaguered crypto firm Bitfinex.

Some of the alleged evidence against Yosef appears to indicate conspiracy.

One piece of evidence cited by the court allegedly shows a text message to an anonymous individual “regarding the need to transfer $10,000,000 to a bank located in the Bahamas, knowing that the funds would be transferred from a bank account maintained with a bank located in Manhattan, New York”.

The case has had wider implications for the crypto industry.

Crypto Capital’s client Bitfinex, a well-known crypto brand responsible for the cryptocurrency Tether, has faced accusations of fraud of its own in recent months.

However, it is now arguing that it itself has been a victim of fraud – namely that of Crypto Capital.

In a statement, Bitfinex specifically responded to allegations that Crypto Capital was a money laundering exercise for the proceeds of sales of drugs.

“We cannot speak about Crypto Capital’s other clients, but any suggestion that Crypto Capital laundered drug proceeds or any other illicit funds at the behest of Bitfinex or its customers is categorically false”, it said.

“This week’s developments do nothing to affect or otherwise deter Bitfinex’s claims to funds in Poland or anywhere else. We will continue to work to recover all funds for and on behalf of our stakeholders.”

UAE crypto regulation could be on the way

The United Arab Emirates could be about to take up a range of newly drafted crypto regulations after an authority there announced it had created a draft set of principles.

The country’s Securities and Commodities Authority (SCA) says that it will now investigate the possibility of further regulation.

According to analysts, the main impetus is to reassure potential crypto business leaders that the UAE is a safe place in which to invest.

“They are signalling that they are open to exploring this area and by creating guidelines they are giving more reassurance, confidence and stability to businesses owners who may want to enter this field”, said blockchain author Sukhi Jutla in an interview with Cointelegraph.

“The UAE has been smart enough to understand that this innovation will grow in years to come and they don’t want to miss it”, she added.

Chris Lee

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