You’ve probably never heard of Reginald “Reggie” Fowler, the head of Crypto Capital Corp (CCC). One of the arms of the CCC was Global Trade Solutions, responsible for moving the money of stablecoin Tether and the Bitfinex exchange, of the iFinex group.
Reggie had his assets blocked by the NY Department of Justice in April 2019, accused of money laundering, bank fraud, and involvement with the Colombian drug cartel. What’s more, fake $14,000 was found in the boy’s office. His partner, Ivan Manuel Molina Lee, was arrested in Poland 6 months later.
Involvement of Tether and Bitfinex
iFinex claims it transferred $1 billion to the CCC, but was unable to recover $850 million despite allegedly never having signed any formal contract.
Interestingly, the Department of Justice found an October 2018 chat in which an iFinex executive, nicknamed Merlin, pleaded with CCC’s Oz Yosef to return $100 million, which could be paid in cash or in USDT currency.
This fateful conversation ends with Merlin saying “BTC could drop below $1,000 if we don’t act fast.”
iFinex pays $18.5 million fine
In February 2021, iFinex settled with the NY prosecutor, paying a fine of $18.5 million for deceiving customers after losing the $850 million.
Many are confused here, thinking the case is closed, but this does not prevent lawsuits in other courts, or direct actions by clients who feel aggrieved. There is an investigation opened by the US Department of Justice, for example, as quoted by Bloomberg in July 2021.
Finally, the prosecution’s investigation was not looking for evidence of manipulation of the price of Bitcoin, or of Tethers issued without backing.
What happened to Reggie Fowler?
That’s where the danger lies. Reggie posted $5 million bail to await the appeal in freedom. In addition, he refused a deal in which he would pay a $371 million fine. After defaulting on the lawyers, his trial is scheduled for February 14, 2022.
News in the case
UK police confiscated $408 million in July 2021 when they arrested Oz’s sister and accomplice Ravid Yousef. In short, the siege is closing, and court proceedings are moving forward. There are many open questions, for example the relationship of CCC and iFinex.
Whether stablecoin Tether will survive? We will only know after the group opens its mouth if they reach an agreement or are eventually condemned.