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Bitfinex Claims to be a 'Victim of Fraud'

By Jamie Green – Crypto Specialist

Renowned crypto exchange giant, Bitfinex claims to be a "victim of fraud" in response to the arrest of Crypto Capital exchange's president. Could such a claim affect whether users choose to buy and sell Bitcoin here?

Recovery of Lost Funds

After the Oct. 24th arrest, Cointelegraph got a response statement from Stuart Hoegner, general counsel of Bitfinex on Oct. 25th. This statement attempts to establish the company as a "victim of fraud" as well as deny any possible accusations of illegal activity. Buying and selling Bitcoin can be a risky activity and requires extra care.

Bitfinex claimed in the statement that any accusation that Crypto Capital -  a former payment processor of Bitfinex - laundered illegal funds at the request of Bitfinex or its customers is "categorically false." The exchange writes that:

“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.” The company seems determined to recover the fund and allow users to continue buying and selling Bitcoin through the platform.

It was report through Cointelegraph that Crypto Capital president, Ivan Manuel Molina Lee was arrested by Polish authorities for his alleged involvement in facilitating money laundering through cryptocurrencies for international drug cartels. Molina Lee was actually detained on the assumption of a European Arrest Warrant in connection to $350 million that was previously acquired by the Polish Ministry of Justice. It could be that Bitfinex was unaware of the cartels schemes to buy and sell Bitcoin for money laundering and funding illicit activities.

Crypto Capital was supposedly responsible for Bitfinex's loss of $880 million. IFinex, Bitfinex's parent company filed a discovery application to help it regain access to over $880 million in funds tied to Crypto Capital on Oct. 18, claiming the authorities don’t keep the funds of Bitfinex's clients.

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