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(ID: BlockBeats), original author: DecryptMedia, original title: Crypto Capital's dark history and status in the currency circle, translator: 0x5, reprinted by Odaily with authorization.
The dark history of Crypto Capital and its inextricable connection with various characters in the cryptocurrency circle.
Crypto Capital works closely with institutions involved in financial crimes, money laundering, and digital security fraud. Of course, there are also some large cryptocurrency exchanges involved.
Crypto Capital is slowly rising and has the potential to become the "central bank" of the digital cryptocurrency industry. It provides port-level "banking" in the encryption industry. One of the ports is represented by large cryptocurrency companies and exchanges, including Binance, Kraken and BitMEX, and the other port is a series of small companies involved in financial fraud and money laundering represented by QuadrigaCX (now out of business) .
On Tuesday, two individuals reportedly associated with Crypto Capital were indicted in connection with the money laundering transactions. The federal government staff said that the two provided banking services to some cryptocurrency companies, which involved a company called Global Trading Solutions LLC, which has been identified as one of the many shell companies owned by Crypto Capital. . Although the owner is Crypto Capital, the user is the Bitfinex exchange. This special "banking service" is described by the prosecutor as: "operating a shadow bank, representing a large number of cryptocurrency exchanges, providing financial transaction services outside of supervision, involving hundreds of millions of dollars."
"Crypto Capital, a Panamanian company that has escaped supervision, has provided banking services to cryptocurrency companies around the world for many years without any formal license," the indictment also reads.
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Where did Crypto Capital come from? Who is the manipulator behind the scenes?
The original story:
The original concept of Crypto Capital was found in a post on Reddit six years ago, authored by Bitfan2013. According to Mathias Grønnebæk, CEO of Braveno, an open source financial infrastructure company: Last year, Grønnebæk was deeply fascinated by this mysterious company and started a series of investigations.
Grønnebæk says: The first lead into the investigation came in May 2013 in a Reddit thread called Bitfan2013. The mysterious netizen who hides behind the Internet claims that he (and his family) have board seats in four small and medium-sized banks, and then he proposes his vision: Bitcoin users, miners, traders, programmers, everyone Time to act! It is time to build a real and authoritative bank from scratch! This bank is designed specifically for cryptocurrencies.
The article even proposes a more specific location: Panama. This place is a tax haven for offshore companies.
One month after this post was issued, Crypto Capital (named Crypto Financial at the time) was established and registered in Panama. In August, it kicked off the IPO process, raising 30,000 bitcoins (about $300,000) through Havelock Investments, also a Panama-based financial services firm.
Havelock specializes in dealing with Bitcoin-related IPOs, and also provides a fund project for the sale of shares on the Bitcoin exchange MPEx. The main gambling site.
After that, the SEC (US Securities and Exchange Commission) determined that Satoshi Dice was an unregistered securities issuer, and Voohees also paid a fine of 35,000 US dollars for this, and promised not to get involved in the securities trading business in the next five years.
Havelock Investments also operated the IPO for the Bitcoin startup “Neo and Bee”, and in 2014, the Cyprus police launched an investigation into the company for alleged commercial fraud. The company's founder, Danny Brewster, fled, allegedly with 140 bitcoins stolen at the time, and has not been prosecuted since.
In an exclusive interview with Decrypt Media, Voorhees said that in Panama about six years ago, he had met with one of the six key players in Crpto Capital. He also said: If it wasn't for the cooperation between Coinapult Exchange and Crypto Capital, he might not know about Cryoto Capital, let alone such a meeting. He also stated that he has no relationship with Havelock Investments.
Crypto Capital was later acquired by a Swiss firm, Global Trade Solutions, which began as a management consulting firm. In November 2018, an "acting director" appeared on the company's registration documents. This person in charge is often hired to represent a shell company. This person is Ivan Manuel Molina Lee. In the following articles, we will often see this person's name appear.
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Filling the gap in banking services
In the heated world of cryptocurrencies, Cryoto Capital fills a special niche: it provides banking services to crypto companies at a time when traditional banks are avoiding them like the plague. Soon, it rose to fame, and despite not having any specific registered address on its website, completely anonymous, it has become well-known in the cryptocurrency world. More importantly, not only gray area encryption companies, or criminals such as fraudsters have become its users, but a large number of companies with good reputations have also registered as its users.
For example: Kraken, an exchange in San Francisco, is very famous and trusted by everyone, but it is also using Crypto Capital. But Christina Lee, the exchange's chief brand officer, said in an exclusive interview with Decrypt that they had cut ties with it in early 2017. Similarly, Wei Zhou, CFO of Binance Exchange, also said in an interview with Decrypt: His exchange has also used Crypto Capital's banking services for a period of time.
But Crypto Capital has also indeed appeared in the dirtiest corners of the encryption world, and has been involved in at least one major scandal.
Canada's largest cryptocurrency exchange, QuadrigaCX, is now notorious and was once Crypto Capital's most valuable client. You can still find this company listed on the Crypto Capital website until now. Once, the Canadian exchange closed its doors following the mysterious death of the company's CEO. According to previous chat records, the exchange is using Crypto Capital to manage customers' money.
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The man behind Crypto Capital
In the New York Attorney General's prosecution documents, a chat transcript was included between Bitfinex representative Merlin and Crypto Capital representative Oz. Voorhees also said in an interview with Decrypt: He did meet Oz 6 years ago, but he couldn't remember what the person's last name was, or more detailed private information.
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It is rumored to be a picture of Oz Yosef himself
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Trouble with Crypto Capital
The way Crypto Capital works is actually very simple. Set up a shell company, get a bank account, wait until that account is blocked, and then move on to another account. Phil Potter, Bitfinex’s chief strategy officer, described the approach as “the ‘cat and mouse game’ that everyone in bitcoin circles knows.”
A strategy that works until the day it fails.
In fact, Crypto Capital has been involved with companies involved in money laundering. For example:
Since May 2015, Bitcoin exchange Safello has used Crypto Capital to engage in money laundering. According to CEO Frank Schuil: At the end of 2017, they interrupted their business because of the slow feedback from Crypto Capital and the deteriorating service quality.
Moreover, in the past few years, many forums and websites have revealed that it is difficult to withdraw funds from Crypto Capital, and Crypto Capital has been deeply involved in these negative news.
Just recently, QuadrigaCX's former chief architect, Alex Hanin, condemned his exchange's withdrawal issues at Crypto Capital. He said one of the funds was frozen in a Crypto Capital account in Taiwan. Whether or not the money has been unfrozen is still unclear.
