On Friday, the price of Bitcoin surged over 30 percent. This morning, the price touched the $10,000 mark before a bit of a rollback. The head of digital assets at VanEck investment fund believes one reason for the surge in the Bitcoin price was the arrest of the Polish-based Crypto Capital's CEO, which has been accused by Bitfinex of freezing $850M from earlier this year.
Now, Bitfinex may get a chance to recover some of that money.
3 reasons why #Bitcoin surged today:— Gabor Gurbacs (@gaborgurbacs) October 25, 2019
> CME Bitcoin futures expired today (4PM London time, last Friday of the month).
> President Xi Jinping supports blockchain in China.
> Crypto Capital CEO arrested. Exchanges, such as Bitfinex, may get some of the seized $850M back.
Could the Crypto Capital CEO’s arrest affect the BTC price?
At the weekend, VanEck’s director of digital assets, Gabor Gurbacks, published his thoughts as to what reasons may have caused the BTC price spike. Among them, he mentioned the arrest of Crypto Capital's CEO, Ivan Manuel Molina Lee. The principal of the company, Oz Yosef was also taken in custody. Lee was charged with money laundering in connection with drug trafficking, the second one was indicted with a bank fraud. The news was reported in a Bloomberg news piece.
Curiously, Crypto Capital is linked to the Bitfinex crypto exchange which is amidst of a court trial. One of the issues there was the cover-up of an $850M loss of customer funds with an extra emission of USDT stable coin initiated by the crypto exchange.
In court, Stuart Hoegner, General Council to Bitfinex, stated to Bloomberg:
“Bitfinex is the victim of a fraud and is making its position clear to the relevant authorities, including those in Poland and the United States.”
Bitfinex now attempts to get its money back
When authorities froze Crypto Capital’s bank accounts in Poland earlier this year, they seized around $363M from the local fiat currency Zloty. Bitfinex is now trying to recover this money as part of Crypto Capital's frozen funds.
“This week’s developments do nothing to affect or otherwise deter Bitfinex’s claims to funds in Poland or anywhere else. We will continue to work to recover all funds for and on behalf of our stakeholders.”
Bitfinex works in partnership with Tether Ltd. and the same management team. Some in the crypto community believe that the Bitcoin price is often manipulated with USDT when new emissions of this coin take place. Besides, many are doubtful that USDT coins are 100 percent backed by the USD.
Do you believe the arrest of the Crypto Capital CEO indeed affected the Bitcoin growth on Friday? Feel free to leave a comment below!