U.S. prosecutors are seeking to detain Reginald Fowler until his trial for operating an unlicensed money transmission business which may have processed funds for the Bitfinex crypto exchange.

https://www.coindesk.com/u-s-doj-moves-to-detain-defendant-in-crypto-shadow-banking-case


Fowler was charged with bank fraud, conspiracy to commit bank fraud and conspiracy to operate an unlicensed money transmission service　earlier this week　by the U.S Attorney’s Office for the Southern District of New York.

Alongside an associate, Tel Aviv-based Ravid Yosef, Fowler is alleged
to have provided cryptocurrency exchanges with banking services illicitly and may be an operator of Crypto Capital, the payment processor at the heart of the Bitfinex/Tether scandal.

Indeed, the U.S. Department of Justice’s (DOJ) investigation may be one
reason why Crypto Capital’s funds were frozen, which in turn hampered
Bitfinex’s ability to process its customers’ withdrawals.

It was Bitfinex’s loss of access to some　$850 million through Crypto
Capital　which resulted in its taking out a $625 million loan from
Tether, the stablecoin issuer it is closely affiliated with.

The filing appears to confirm this, noting that “recent public reporting,
which is corroborated in part through interviews conducted in the
course of this investigation, indicates that companies associated with
defendant have failed to return $851 million to a client of defendant’s
shadow bank.”