The U.S. Department of Justice announced Tuesday that it has hit two individuals with bank fraud charges in connection to a system for depositing funds to cryptocurrency exchanges.
In a statement, U.S. Attorney's Office for the Southern District of New York alleged that Reginald Fowler of Arizona and Ravid Yosef, said to live in Tel Aviv, Israel, were part of a scheme that involved using bank accounts to move money into a series of unnamed cryptocurrency exchanges.
Court documents released by the Justice Department purport that the alleged money services business operated between February and October 2018. During that period, prosecutors say, the two "opened and used numerous bank accounts at financial institutions that were insured by the [FDIC]," including one based in Manhattan.
Two Charged With Running 'Shadow Banking' Service for Crypto Exchanges
AAF's initial lead investor is charged with bank fraud
(Score: 0) by Anonymous Coward on Friday May 03 2019, @03:15AM (6 children)
The entire economy is based on the fed saying how much money they will create or not at this point.
Who is auditing the people who might know that before it is announced? Oh, congress is legally allowed to insider trade, they don't even try to hide it...
(Score: 0) by Anonymous Coward on Friday May 03 2019, @03:38AM (5 children)
Examples, please. If it's right out in the open, that shouldn't be a problem, right?
(Score: 0) by Anonymous Coward on Friday May 03 2019, @03:49AM (4 children)
Did you even check? This is just the first link I found:
https://theintercept.com/2015/05/07/congress-argues-cant-investigated-insider-trading/ [theintercept.com]
(Score: 0) by Anonymous Coward on Friday May 03 2019, @04:16AM (3 children)
So the (at the time) R majority made that argument, which bumps right up against the law of the land [wikipedia.org] passed by enormous majorities from both parties:
(Score: 0) by Anonymous Coward on Friday May 03 2019, @04:19AM (2 children)
So, what are the loopholes of this 2012 law?
(Score: 1, Funny) by Anonymous Coward on Friday May 03 2019, @04:22AM (1 child)
Do your own research. Or pay me USD$300/hour (minimum 10 hours) to do it for you.
(Score: 0) by Anonymous Coward on Friday May 03 2019, @04:41AM
Uh. No?
I'm already a Scientologist...
(Score: 2) by MostCynical on Friday May 03 2019, @03:45AM (3 children)
they opened bank accounts.
Deposited and withdrew money.
Where is the "shadow" banking?
"I guess once you start doubting, there's no end to it." -Batou, Ghost in the Shell: Stand Alone Complex
(Score: 2) by c0lo on Friday May 03 2019, @04:14AM (1 child)
Doing it for 3rd parties? (I don't know actually, but that would be my feeling of guts)
https://www.youtube.com/watch?v=aoFiw2jMy-0 https://soylentnews.org/~MichaelDavidCrawford
(Score: 1, Informative) by Anonymous Coward on Friday May 03 2019, @04:20AM
From TFA:
(Score: 1, Insightful) by Anonymous Coward on Friday May 03 2019, @06:49AM
(Score: 0) by Anonymous Coward on Friday May 03 2019, @04:02AM (1 child)
Not the first example of criminal symbiosis between a dope bringing in the business, while a mastermind stays hidden in the shadows. In this case, out of the country.
(Score: 0) by Anonymous Coward on Friday May 03 2019, @04:17AM
Keep those factnuggets to yourself, sir.
(Score: 2, Interesting) by sshelton76 on Friday May 03 2019, @11:44AM (1 child)
This demonstrates quite clearly that there is a business opportunity if done correctly.
Cryptocurrency is considered a threat to status quo banks, especially in the USA which is globally the most dominant center of finance on earth.
Cryptocurrency democratizes this and returns the power to the people and that is a threat to the banking hegemony.
The only place the powers that be can really "pinch" here is on the systems they own and they control, which unfortunately amount to all the on and offramps.
Banks are afraid to deal with cryptocurrency exchanges, it represents a direct threat to their business model. They can profit, but they would need to change their business model and change is scary.
XRP, Ripple is owned by Santander one of the largest non-USA banks in the world. Santander is using the tech behind ripple to create a replacement for the swift network and they have over 150 banks signed up to pilot a person to person transfer app. https://oracletimes.com/santander-is-planning-to-expand-ripple-powered-cross-border-payments-app-one-pay-fx/ [oracletimes.com]
This is a good start, but it still leaves people at the mercy of banks to access their money and this is anathema to the ethos of the community which believes that nothing should come between you and your money.
The company I work with, is working to solve this. We have a plan and are building the tech. It's exciting times.
Each time one of these "processors" gets taken out, we hold a meeting and we get to learn what they did right and what they did wrong.
In the case mentioned above, these guys were opening accounts around the world using shell companies to avoid disclosing properly what the accounts would be used for.
As a result, their own funds were frozen, their accounts closed. This had a severe impact on them and the exchanges that utilized them.
In the future, class A licensed specialist banks will emerge for dealing with crypto just as specialist banks are beginning to emerge to solve the cash problem for pot dispensaries. It is only a matter of time.
(Score: 2) by DeathMonkey on Friday May 03 2019, @07:00PM
Alternative, hypothesis: Adding "on a blockchain" to the end of the sentence doesn't make money laundering laws disappear.
(Score: 3, Touché) by Phoenix666 on Friday May 03 2019, @01:37PM
They were indicted because they were cutting in on HSBC's money laundering business [forbes.com].
Washington DC delenda est.
(Score: 0) by Anonymous Coward on Friday May 03 2019, @01:57PM (1 child)
This is about cryptocapital, who bitfinex/tether has accused of stealing/losing $850 million of their funds. I don't know how they could report on this more poorly.
(Score: 0) by Anonymous Coward on Friday May 03 2019, @05:36PM
wow