Has €400 Million Been Seized From a Bitfinex Account in Poland?

Exchanges, Law and Regulation, News

In November 2017, Bitfinex announced a Euro trading pair with Bitcoin that was made possible through a small Polish bank. Bitfinex is currently the largest Bitcoin exchange in the world with several hundred million dollars’ worth traded every day.

Incidentally, Mt. Gox also had a bank account in Poland before they ceased trading. Bitfinex CEO is Jan Ludovicus van der Velde, and he is also the CEO of Tether Limited. Philip Potter is chief strategy officer for Bitfinex and Tether Limited, so it appears Bitfinex and Tether Limited are controlled by the same individuals. It’s not unusual for directors and shareholders to have a stake in more than one company, but Tether has come under scrutiny from some elements of the crypto community. Furthermore, towards the end of 2017, both companies were subpoenaed by the US Commodity Futures Trading Commission (CFTC).

Tether, with ticker USDT, is supposed to be a stable cryptocurrency backed 1:1 with the US dollar. To date, no proof has ever been provided that the circulating supply of USDT on crypto exchanges is matched by actual US dollar bank deposits. The auditor for Tether was Friedman LLP, and they were tasked with trying to verify the 1:1 claim. Towards the end of January 2018, Tether announced they were no longer using Friedman LLP as their auditor.

The reason Tether gave for parting company with their auditor was, “given the excruciatingly detailed procedures Friedman was undertaking for the relatively simple balance sheet of Tether, it became clear that an audit would be unattainable in a reasonable timeframe”. Make of that what you will.

Returning to Bitfinex, the exchange was reportedly hacked in August 2016 with the loss of 120,000 Bitcoin. This wasn’t the first hack that Bitfinex suffered having lost 1500 Bitcoin in 2015. Bitfinex compensated investors affected by the 2016 hack in their own exchange token, BFX. From September 2016 to April 2017, Bitfinex redeemed the BFX tokens from the investors.

Narodowy Bank Polski (NBP)

News is now filtering through via Trustnodes that €400 million may have been seized by Polish authorities, at the request of Europol or Interpol, from either Bitfinex’s bank account or the accounts of Bitfinex account holders. Almost 1.3 billion Polish zloty was supposedly transferred from drug cartels in South America to the small Polish bank.

There is some suggestion that the funds transferred from South America were an attempt to launder fiat currency into cryptocurrency via the Bitfinex exchange, and Bitfinex may not have any direct links to drug cartels. Several threads have popped up on Reddit with speculation of how the funds came to the attention of the Polish authorities. Bitfinex via Reddit user kethfinex has said, “this is not true, and Bitfinex aren’t affected by whatever has happened. We’ll be releasing an official statement on this later today”.

Financial analyst, smartphone app designer, technical writer, and crypto enthusiast. Blockchain verified graduate of MOOC 9, DFIN-511: Introduction to Digital Currencies, run by the University of Nicosia.

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