…Researched and contributed by Henry George.
Paul Robinson, a former footballer, has pleaded guilty to charges of bank and wire fraud.
The charges stem from his involvement with Crypto Capital Corp., a shadow bank that lost millions of dollars belonging to Bitfinex, a cryptocurrency exchange.
Robinson has admitted to using his position as a consultant for the bank to deceive Bitfinex and other clients.
Robinson’s Role in Crypto Capital Corp.
Robinson served as a consultant for Crypto Capital Corp., a company that provided financial services to cryptocurrency exchanges and other businesses in the crypto industry.
According to the indictment, Robinson helped the company deceive its clients about the true state of their accounts and the safety of their funds.
The company also allegedly used fake bank accounts and false identities to obscure its operations.
The Loss of Bitfinex’s Millions
Bitfinex, one of Crypto Capital Corp.’s clients, lost access to $850 million in funds that were being held by the shadow bank.
The exchange filed a lawsuit against the bank in 2019, alleging that the funds had been seized by authorities in various countries.
The loss of these funds contributed to a decline in the price of Bitcoin and other cryptocurrencies.
Commentary
Paul Robinson’s admission of guilt highlights the potential risks associated with the unregulated world of cryptocurrency.
Shadow banks like Crypto Capital Corp.
operate outside of the traditional financial system and can be difficult to monitor and regulate.
This case also underscores the need for cryptocurrency exchanges and other businesses in the industry to exercise caution when choosing financial service providers.
By taking steps to verify the legitimacy of these providers and to protect their customers’ funds, they can help prevent incidents like the one involving Bitfinex and Crypto Capital Corp.