The man who’s thought to have run the company that processed payments for dubious crypto exchanges was on Friday charged with wire fraud, adding to current charges of fraud and money laundering.
The indictment, filed Friday by a New York district court, alleged that Reginald Fowler earned his money on “false and fraudulent pretenses.”
On the books, Fowler is the CEO of a company called Global Tradings Solutions LLC, which is one of several suspected shell companies associated with Crypto Capital—a Panama-based “shadow bank” allegedly responsible for hundreds of millions of dollars of unregulated transactions for a host of big-name crypto businesses and exchanges, according to a New York court indictment last year.
The additional charges filed Friday claimed that Fowler opened several US-based business bank accounts at a number of different banks, and tricked them into accepting his business on the premise that the accounts were for real-estate investments.
The story of Crypto Capital’s dark past and its deep ties with the crypto industry
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 bi...
The indictment further alleges that Fowler used some of that money invested in a sports league. Fowler was the lead investor in the Alliance of American Football, a sports league set up as a rival to the National Football League. The league closed down in the middle of its first season.
Fowler is also charged with defrauding those associated with the sports league because he lied to them about where he’d got his money from. According to the indictment, he’d told them that the money was his own when, in fact, Fowler earned his money “through the unlicensed money transmitting business.”
Bitfinex and Quadriga CX were among customers of Crypto Capital.
Hong-Kong-based Bitfinex is currently under investigation by the New York Attorney General for allegedly raiding the reserves of its sister firm Tether to hide an $800+ million hole in its finances. Bitfinex claims it was defrauded by Crypto Capital.
Crypto Capital accounts were seized in Backpage sex-trafficking bust
Did a sex-trafficking site spark the whole investigation into Crypto Capital, the mysterious Panamanian payment processor at the center of the Bitfinex scandal? For more than a week, the denizens of cryptoland have been captivated by the Panama-based “bank” and the case of the missing $850 million. As it turns out, however, Crypto Capital has a long and sordid history within the cryptocurrency industry, with ties to some of the biggest players in the game. But beyond names like Binance and Krake...
Quadriga CX is a defunct Canadian crypto exchange whose investors lost their money when the exchange closed after the sudden death of its operator, Gerard Cotton, suddenly died. Investors allege that Quadriga CX misappropriated customer funds.
Last year, Fowler pleaded not guilty, though for a while mulled over a plea deal which would require him to forfeit $371 million he allegedly has access to. Earlier this month, he rejected the plea deal. The next hearing is set for April.
