(Blockcubed) Emerging reports from Polish media suggest that authorities in the country are investigating a major cryptocurrency exchange for fraud and possible ties to Colombian drug cartels, reports Coin Telegraph.
The investigation is allegedly tied to Colombian drug cartel operations, a local news outlet reported April 6. The report has not yet been officially confirmed or denied by Bitfinex.
According to local media website TVP Info, prosecutors in Lodz Voivodship just West of Warsaw have seized some $380 million held in multiple accounts at a regional bank.
Polish tech blog Spider’s Web says that their “unofficial” investigation revealed the accounts are linked to well known cryptocurrency exchange Bitfinex:
(Original report has been translated into English via Google and posted below in its original form)
One of the largest and most controversial cryptocurrency exchanges Bitfinex received a big hit in Poland today – PLN 1.3 billion at the Cooperative Bank in Skierniewice was seized by the prosecutor’s office . The money is to be linked through the Bitfineks network of companies and the Colombian drug trade.
On April 6, 2018, Zbigniew Ziobro boasted about his success of $ 370 million. associated with fraud, people whose names appeared in Panama Papers and companies that are pillars of the “large foreign cryptocurrency market”. The accounts were to be located in a small Polish bank.
Our unofficial information shows that it is about Bitfinex. The Polish prosecutor’s office has not raised any charges yet, and due to the international dimension of the case, the Central Investigation Office cooperates with Europol and Interpol.
A spokesperson for Bitfinex and moderator of the Bitfinex Reddit forums immediately responded to the claims:
This is not true and Bitfinex aren’t affected by whatever has happened. We’ll be releasing an official statement on this later today.
It has been revealed through various online investigators, including the controversial @Bitfinexed whistleblower Twitter page, that Bitfinex was having difficulty maintaining bank accounts around the world due to their unregulated cryptocurrency activities and eventually settled on banks in Poland:
Bitcoin’s biggest exchange, Bitfinex, which currently handles around half a billion in bitcoin trading volumes, has launched a euro trading pair after seemingly securing a bank account with Bank Spółdzielczy w Skierniewicach which translates to Cooperative Bank in Skierniewice (pictured above).
The tiny bank apparently had assets of only around $13 million in 2011, according to wikipedia, making profits of around $5 million.
Source: Trust Nodes
Skierniewicach is located in the Lodz Voivodship region of Poland, the same area in which the Polish government seized drug cartel linked funds.
According to Crypto Globe:
While analyzing this company’s’ connections, investigators found a “man with citizenship of Colombia and Panama,” associated with a large cryptocurrency exchange, according to tvp.info . While this news outlet does not name Bitfinex, it claims “millions of these operations flowed through small Cooperative Bank in Łódź Voivodship.” Bitfinex is believed to have a bank account with a bank located in Skierniewice , a town in Łódź Voivodship.
Per Polish news outlets, a chain of companies was being created. These were used to “hide money from smuggling cocaine to Europe. The companies were also used for large scale scams.” Bitfinex was seemingly involved in these operations as criminals used it to launder money by exchanging it for cryptocurrencies.
However, some have suggested that Bitfinex may only be implicated in an official investigation as a result of using a banking intermediary that handled accounts for numerous clients, some of whom may be tied to nefarious activity:
They mention small cooperative bank in Łódzkie Voivoidship. How many of those are there?
They also mention company called C. registered “near Pruszków” and operated by some individual from Panama.
Everything matches here.
OP is wrong that the account “belongs” to Bitfinex. It was used by Bitfinex but owned by Crypto Sp. Z o.o. which main business was apparently to provide bank account to other businesses. Including some involved with drug trade.
Adding further intrigue to the reports that Poland, Europol, and Interpol are investigating drug cartel activities linked to cryptocurrencies, bank accounts and the exchanges that can turn digital assets into real-world cash is an online post dating back to March 28, 2018.
The individual claims to have testified as a witness in the investigation and says they received “cash with Bitfinex.” The post is available below and has been translated into English from its original version.
Authorities in Poland and broader Europe have remained silent on the full breadth of the investigation and no official accusations or charges have been brought against Bitfinex.
The Bitfinex-linked cryptocurrency Tether has not been mentioned publicly by officials as having been utilized in illegal crypto-to-cash transactions.
Late last year, amid building regulatory interest in cryptocurrencies, the U.S. Commodity Futures Trading Commission sent subpoenas to Bitfinex and Tether. The CFTC declined to comment on the reasons for their inquiry and Bitfinex said in an email statement that it was a routine regulatory request.
The company’s influence in the cryptocurrency sector and it’s direct relationship to Tether, which is responsible for over 60% of Bitcoin’s US Dollar volume, could have serious consequences for market liquidity should the company be officially involved or charged in an investigation linked to nefarious activities linked to drug cartels and money laundering.
BlockCubed.com has contacted Bitfinex for comment but did not receive a response at print time. We will publish their response or forthcoming statement when it is made available.