Hong Kong-based Bitfinex, which is already locked in a court case with the New York Attorney General, has filed a subpoena application for discovery and production of documents in a Central California District Court.
The application asks for deposition of Rondell “Rhon” Clyde Monroe, former vice president of TCA Investment Bancorp and Trust Company. According to the filing, Crypto Capital used its accounts at TCA to transfer Bitfinex’s funds.
“Applicant (Bitfinex) believes Monroe to have information and documents vital to their claims in the proceedings identified above, and which will substantiate Applicant’s claims to hundreds of millions of dollars,” it states.
Specifically, Bitfinex aims to recover $306 million of the $880 million total amount from Global Trading Solutions (G.T.S)—a U.K.–based entity run by Reginald Fowler, who is already under investigation for fraud. Bitfinex’s application claims that Fowler provided access to various European banks for the Panama-based Crypto Capital. It also asks for Fowler to appear before the court.
A relationship that deteriorated
The relationship between Bitfinex and Crypto Capital began in 2014, and the latter quickly became among the few payment processors willing to work with the exchange after mainstream banks began terminating their relationship with Bitfinex due to regulatory uncertainty regarding crypto.
The surge in cryptocurrency markets during a bull run in 2017-2018 resulted in an inflow of funds towards Crypto Capital, as big traders placed sizeable positions in the markets. The filing claims that Crypto Capital held funds in excess of $1 billion by July 2018.
A series of government crackdowns on crypto due to money-laundering cases that year escalated Bitfinex’s concerns about its relationship with the payment processor, however. According to court documents, Crypto Capital told the exchange that its bank accounts located in Poland, Portugal, the UK and the U.S. had been seized or frozen by government authorities.
Bitfinex claims that Crypto Capital did not use a single account but has spread the funds it received from investors across multiple accounts. Among the banks named in the suit are HSBC and Citibank, as well as Bank of America, Bank of Colorado and Enterprise Bank & Trust.
The deposition and testimony is expected to reveal ownership and funds information related to the investment firm’s accounts at the banks.