Nearly a year ago drama surrounding Crypto Capital Corp (CCC) began to unfold, and though people in the cryptocurrency community seem to appreciate that CCC is a fascinating story, the possible ramifications aren’t widely acknowledged. CCC is not a minor hiccup, like AltBits or FCoin, nor a nuclear cryptocurrency bomb like MtGox, but somewhere in between: an example of gray-zone operations targeted by law enforcement to establish precedent over entities on the razor’s edge of legality.
The web woven around CCC is a tangled one, and it’s tough to grasp the possible fallout from a complex slew of offshore companies. CCC has existed since 2013 and, at one point or another, has been associated with almost every cryptocurrency exchange still running. Of course, all exchange operators conveniently have distanced themselves from the shadow bank as it’s gone down in flames.
In March and April of 2019, Ivan Manuel Molina Lee and Reggie Fowler, respectively, were arrested. Molina Lee is the director of CCC and Fowler is the owner of Global Trade Solutions, a company deeply intertwined with CCC. Since these arrests, there has been little concern about the outcomes of these court cases. Fowler rejected a plea deal in January,was charged with more crimes in March, and has a trial set to begin in January of 2021. As for Molina Lee, no one has bothered to follow up on what’s become of him.
The Molina Lee case is particularly troubling, as media failed to report on his apprehension until seven months after the fact, when he was openly extradited from Greece to Poland. In addition, two other indicted CCC associates, Oz and Ravid Yosef, remain at-large, with no word on where they could be or if they will ever see justice.
The NYAG v Bitfinex, Virgil Griffith, and the takeover of STEEM by exchanges has drawn a lot of attention and is proof that regulators and the community have an eye on ridding the space of bad actors, but I believe the CCC cases may harness just as many answers to regulatory uncertainty as any case on the docket. For instance, will Bitfinex and QuadrigaCX creditors be entitled to funds recovered from CCC? Or, will proof of ownership over assets (be they dollars, Tethers, Bitcoins, or otherwise) be too much to ask? How have shadow bank operators and less transparent exchanges altered business practices since the failure of CCC?
The way in which the CCC litigation is resolved should help provide clues — good or bad — for how the necessary gray market in cryptocurrency will be targeted in the future. If there are convictions, it could be a shot over the bow to fiat-cryptocurrency exchanges that believe themselves to be operating outside the jurisdiction of US authorities. If, somehow, Fowler, Molina Lee, and the Yosefs walk away with little more than slaps on their wrists, it could mean a more freewheeling and dealing atmosphere for exchanges that have done their best to skirt the law.
Not being a lawyer or having any legal background whatsoever, it’s impossible for someone like myself to attempt to determine what possible outcomes will arise from the fallout of CCC, but with the knowledge it involves nearly a billion dollars, banks and businesses in Poland, Portugal, Panama, Switzerland, Colombia, the Bahamas, and the US, it likely means there will be ramifications felt globally. At least one of the Yosefs was last spotted in Israel, where Bibi Netanyahu was pictured with several blockchain tech influencers after his successful campaign. Will this simple fact impede a massive investigation? Will Fowler plea? Will Molina Lee remain in Polish prison?
Indubitably, we’ll find out the answers to all of these questions, but it’s my belief that bringing these concerns to the forefront now could save a lot of heartache later. I’ve been wrong plenty of times before, though. Perhaps all the employees of CCC have kept their cards close to the vest and have a thoughtful, strategic plan in order.
I’m not holding my breath.
Stay skeptical, friends.