Shadow banking, former NFL owners, unbacked stablecoins, and Colombian drug cartels; it sounds like a plot from a Hollywood B movie, but it is the reality surrounding Reginald Fowler, the alleged shadow banker for Tether.
After multiple legal twists and turns, one of which saw Fowler search for a new legal team after he failed to pay his previous reps, a trial date has been set for February 14, 2022, subject to change if there are further coronavirus restrictions.
Fowler stands accused of providing shadow banking services through his firm Crypto Capital among multiple other charges. The firm has links to both iFinex, the parent company of Bitfinex and Tether, and Colombian drug cartels.
Who is Reginald Fowler? What did he do?
CoinGeek has covered the Reggie Fowler case in detail, but a quick refresh on what has happened so far won’t hurt.
Fowler played pro football with the Arizona Wranglers and later invested in the Minnesota Vikings. After his football career, he became a wealthy businessman, but one of his ventures, Crypto Capital, quickly fell afoul of the law.
Fowler stands accused of multiple crimes, including bank fraud, wire fraud, illegal money transfer, and conspiracy in relation to shadow banking. He was offered a plea deal that would have left him on the hook for $371 million, but he refused the offer in early 2021.
The charges related to shadow banking allege that Crypto Capital provided banking services to Bitfinex, Binance, and other unregulated exchanges. The shadow banking services to Bitfinex allegedly began when the firm was booted out of Taiwan in 2017. The scheme saw Bitfinex customers deposit to various bank accounts around the world, all of which were controlled by Crypto Capital.
In October 2019, Crypto Capital boss Ivan Lee was arrested in Poland, and everything began to unravel with over $350 million in funds seized from one of Crypto Capital’s subsidiaries in April 2018. These funds allegedly contained cash laundered for Colombian drug cartels.
Perhaps it’s better to be in custody than to owe Colombian drug cartels millions of dollars?
More dodgy links to Tether and Binance
Could these links to money launderers, fraudsters, and Colombian narcotics cartels be why Tether is so reluctant to reveal its banking partners and the exact commercial paper it supposedly holds to back USDT? It wouldn’t be unreasonable to wonder what legitimate bank or company would do business with an entity linked to people like Reggie Fowler.
And once again, we have potentially criminal links to both Bitfinex and Binance. Isn’t it funny how Dr. Craig Wright’s biggest critics, which include Changpeng Zhao, Ricardo Spagni of Monero fame, and many characters linked to Bitfinex and Tether, always manage to pop up in the web of characters linked to real and serious criminal charges around the world?
Bitfinex and Tether have already been instructed to cease operations in New York after paying $18.5 million in civil penalties in a case related to covering up an $850-million loss by commingling funds. Whether or not other jurisdictions will follow suit remains to be seen, but since Tether is currently under investigation by the U.S. Department of Justice in relation to bank fraud charges, the probability of further bans is high.
There’s no escaping legal reality
The lesson in all of this is simple; the law is slow, but eventually catches up with criminals even if they think they’re out of reach by operating in an alternative financial system.
Any notion of avoiding it because of decentralization, distributed and informal partnerships, or the false notion of anonymity in digital currencies is naive at best and reckless at worst.
As regulators come to grips with the digital currency space and begin to both apply existing laws and create new ones to govern it, we’re likely to see a lot more dirt come to light. Whatever legal fate awaits Reggie Fowler, it will only be the beginning of what’s to come as the criminality permeating the digital currency space is exposed.
Follow CoinGeek’s Crypto Crime Cartel series, which delves into the stream of groups—a from BitMEX to Binance, Bitcoin.com, Blockstream, ShapeShift, Coinbase, Ripple and Ethereum—who have co-opted the digital asset revolution and turned the industry into a minefield for naïve (and even experienced) players in the market.
Source: Read Full Article