Bitfinex, the controversial cryptocurrency exchanged headquartered in Hong Kong, has filed an application for discovery with a California court in an attempt to subpoena a former banking executive in order to access $880 million USD in frozen funds.

Bitfinex Seeking to Recover “Missing” Millions

iFinex, the parent company of Bitfinex, submitted the request on October 18 in the US District Court for the Central District of Southern California, asking permission to take the deposition testimony of Rondell “Rhon” Clyde Monroe, formerly Vice President of investment bank TCA Bancorp. The request says, “In those proceedings, [iFinex] seeks to recover approximately $880,000,000 of funds which it has entrusted to an entity named Global Trade Solutions AG (Global Trade), doing business as ‘Crypto Capital.’”

The filing notes that Crypto Capital “provided services as a payment processor to [iFinex], transferring funds to and from [iFinex] and its customers,” since 2014. However, since December of last year, Crypto Capital has failed to remit the funds, claiming its bank accounts in Poland, Portugal, the United Kingdom, and the United States had been seized or frozen by the various authorities in each jurisdiction. Bitfinex alleges that Crypto Capital used accounts at TCA Bancorp to facilitate the transfer of the exchange’s funds and that Monroe can substantiate these claims.

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More Court Case Controversy

Meanwhile, Bitfinex remains embroiled in controversy, along with its sister company Tether, that it was involved in creating “the largest bubble in human history.” A class-action lawsuit was filed against the two companies in New York earlier this month, accusing them of manipulating the crypto market out of up to $1.4 trillion USD. Allegedly, Tether essentially printed billions of dollars worth of tokens to artificially inflate prices and convince the market that there was a considerably greater demand for cryptocurrencies than in actuality.

Further allegations in the suit claim that Bitfinex took an unlawful loan from Tether in order to cover up the missing $880 million USD, and did not disclose the situation to investors.

Featured Image: DepositPhotos © Ivantsov

Over the past few years, Telegram has become an important part of the crypto ecosystem due to its use as a communication platform for traders as well as market enthusiasts. Hence, it did not come as a complete surprise when the encrypted messaging service platform announced the launch of its own blockchain, the Telegram Open Network (TON).

Major Details

However, it seems to have run into issues with the all-powerful Securities and Exchange Commission. In a new development, the company told its investors that the date of the launch is going to be pushed back from the initial deadline of late October this year.

The company has now stated that the deadline for the launch has been deferred to April 30, 2020. The problem lies in the fact that the SEC has deemed its coin offering worth $1.7 billion to be illegal, and that has put the company’s project into disarray. The tokens for the TON blockchain, named GRM, were sold to qualified investors in two separate rounds, and the sum raised would have helped Telegram in further developing the platform.

The company abided by the SEC rule to sell it to qualified investors only, but since the same investors can actually sell the tokens before the launch, the regulatory body has deemed the whole thing illegal.

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More importantly, the SEC has classified GRM as a security, and hence, the whole thing is entirely under its purview at this point in time. Telegram would now need a vote from investors in order to extend the date of the launch, and it remains to be seen how the whole thing pans out. Telegram spoke about the purchase agreements as well in its press release.

The company stated, “In these circumstances, we propose to make certain limited amendments to the terms of the purchase agreements that remain in place to reflect the fact that fewer Grams will be issued and in circulation on the Network Launch Date.”

Featured image: DepositPhotos © prykhodov