Er, hi. Small Q. Where's our billion-ish dollars gone? We summarize Bitcoin exchange's subpoena requests
iFinex, the parent company of crypto-currency exchange Bitfinex, is seeking subpoenas in its quest to recover more than $880m in missing funds.
Giancarlo Devasini, chief financial officer for iFinex, filed subpoena applications [PDF, PDF] in a US federal district court in California on October 18, demanding information and testimony from Citibank and banking-world bigwig Rondell “Rhon” Clyde Monroe regarding payment processor Crypto Capital.
Drama – Year – New – York – Attorney
The drama started earlier this year when New York Attorney General Letitia James accused Bitfinex of inappropriately covering up massive financial losses by reaching into the vaults of Tether, a so-called “stablecoin” in that each Tether token is backed by an American dollar held in reserves. By siphoning from Tether’s reserves, Bitfinex could temporarily cover its lost funds, it was claimed, a move that attracted industry scrutiny as well as the eye of the NY AG.
Bitfinex and Tether are both ultimately headquartered in the British Virgin Islands, and are said [PDF] to be owned and run by the same executives and staff. Hence the burning questions: why would Bitfinex dip into Tether’s reserves, and if it did, was that to cover its missing funds, and if so, how did the cash vanish?
Bitfinex – People – Bitcoin – Currencies – Trade
For the uninitiated, Bitfinex allows people to buy Bitcoin using real-world currencies, trade that digital dosh, and then convert the crypto-coins back into traditional money, such as US dollars, British pounds, Japanese yen, and euros. However, roughly a billion dollars of real-world dosh, deposited by Bitfinex customers, went missing.
iFinex blamed the disappearance on Crypto Capital, a payment processor it recruited to convert punters’ normal money into Bitcoin and back again to dollars, pounds, euros, and so on, when they wanted to cash out. Crypto Capital claimed the funds it held on behalf of…
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