Bitcoin Forum

This is a very good article, I reckon. I am not certain if it is entirely accurate but its idea as a whole connects with what I said in the QuadrigaCX news thread that some exchanges in the cryptospace might be part of a global money laundering ring.

Might this be what the New York attorney general is going after? It might be under the orders from politically connected bankers to kill their competition in money laundering hehehe.

https://www.newsbtc.com/wp-content/uploads/2018/09/moneylaundering-700x400.jpg

Crypto Capital is slowly emerging as the central bank of the crypto industry. It facilitated banking services from one end of the industry—major crypto businesses and exchanges including Binance, Kraken and BitMEX—to the other, including the now-defunct QuadrigaCX and a number of smaller companies implicated in money-laundering schemes and fraud. And according to the the New York Attorney General, it still serves crypto exchange Bitfinex, where by the end of 2018, it was managing more than $1 billion of the exchange’s client and customers funds.

Read in full https://decryptmedia.com/6824/crypto-capital-follow-up-article

I guess that money laundering is always one of the top things that an investigating governmental agency will look most especially with a cryptocurrency exchange suspected of committing frauds. Money laundering can be so profitable for different players. Personally, I am not against any investigation as long as it is not a witch-hunting expedition and done in good faith. Hopefully, a good investigation can plush out bad players in this industry, can exonerate those who are doing business above board and can be serving as a big warning to entities who are planning to do some sinister acts which can destroy this young industry.

I don't buy the "global money laundering ring" idea. Over the years, Bitcoin exchanges (especially offshore ones) became utter banking pariahs. Nobody wanted to touch them due to banks' apprehensions about AML concerns and unclear regulation of cryptocurrency. I think that was the whole reason that Crypto Capital was launched in the first place -- to solve this problem. I don't think they were launched in order to launder money. When they launched years ago, the market was so small that it wasn't viable for money laundering anyway. It still probably isn't.

My feeling is the NY AG is grasping at straws. They are likely well aware that Bitfinex client funds were seized and they used that fact to claim that Tether was fraudulently violating its terms. I don't think they have any power to enforce anything against Tether, either. They're not like the Department of Justice or anything.

@squatter. Agreed. Also, the New York attorney general's office might be under the orders of a politically connected group that wants to kill Tether and replace it with their own stablecoin or a stablecoin they can control.

I want Bitfinex to win and laugh on the overreaching regulators hehehe.

I think the whole "Tether" thing is contentious and regulators are poking sticks into the whole thing, in the hope that they might unravel where all the money is stored to back up every dollar that supports the tether in existence. We know the US authorities like to seize assets of the bigger organizations to feed their ever increasing budget need for crime prevention and whatever other 3 letter agency needs to spy on their own people.  ::)

It will be a huge money grab for them, if they can bring down a supposed, large money laundering operation in the Crypto space and also some nice political point for their upcoming elections.  ::)

I'm not an Illuminati conspiracy theorist but I'm with squatter here: if there is a "global money laundering ring", then it's not Bitcoin or crypto that's only had little over 10 years to set up the ring and convince the ringleaders of the old world to come aboard.

If there is a ring (and I think you'll find plenty of theories saying there is), then it's the really old names with ageing ringleaders washing old money. I'm talking really old money here, made off conflict, slavery and extermination, etc.

It is a good article, nevertheless, if only because it offers one explanation for why the NY AG is gung ho. Politics? Dead right.

Great blog post.
Crypto Capital is like DCG, a central bank for cryptocurrencies. I wouldn't be surprised to see a Panama Papers style drama coming soon. If we see the same situation, at least people will have forgotten after 1 year.
If banks are involved in some sort, well they will pay a fine as they all do, HSBC, etc you can name it. Crypto Capital's reputation will be damaged but nobody knows it and nobody cares, as for banks, it's another story. ;D

Yeah, probably.

However, there are drug cartels, corrupt politicians, dirty bankers and others that bitcoins and cryptocoins could serve. The cryptospace made money laundering easier to coordinate and easier to transfer money. Alexander Ginnick laundered billions of dollars by using BTC-e. Money laundering might be the no.1 reason that BTC-e was built.

In any case, read Bitfinex's response to the New York attorney general hehehe. I reckon ICOs can learn from this.

“… the Attorney General does not even try to explain how tethers qualify as securities or commodities covered by the Martin Act … the Attorney General should not be afforded the drastic remedy of a preliminary injunction, or an order requiring the Respondents to address blunderbuss document demands, without establishing the basis for its authority to even regulate in this sphere,” Bitfinex’s legal counsel writes in the filing.

https://bitcoinmagazine.com/articles/bitfinex-attorney-general-legal-sparring-continues-new-court-filings/

they're talking tough because they know the NYAG has no means to do anything. they're just blowing smoke up bitfinex's ass.

i'll tell you though, i think this situation bodes really badly. it may not be today or tomorrow, but the feds are eventually gonna seize billions of bitfinex and tether's customer money and probably their domains and servers as well. tether's status may not put them under the NYAG's jurisdiction, but the existence of CFTC-regulated futures markets definitely puts them under federal jurisdiction wrt things like market manipulation. the feds have been digging deep into bitfinex since 2017 and that hammer will eventually come down. when that happens, bitfinex's counsel won't be talking shit.