Bitfinex Granted 2 of 3 Subpoenas in Hunt for Missing Millions

The U.S. District Court of Georgia has denied a subpoena request by the exchange's parent firm as it tries to track down a missing $850 million.

AccessTimeIconJun 18, 2020 at 9:01 a.m. UTC
Updated May 9, 2023 at 3:09 a.m. UTC

Cryptocurrency exchange Bitfinex has suffered a minor blow in its hunt for millions of dollars that went missing two years ago.

Bitfinex’s parent firm, iFinex Inc., is seeking to trace $850 million in user funds seized by authorities in four different countries after bank accounts held by its payment processor, Crypto Capital, were frozen in August 2018.

  • Key Bitcoin Indicator Signals Period of Stability in Crypto Market
    00:52
    Key Bitcoin Indicator Signals Period of Stability in Crypto Market
  • World’s First Bitcoin Bonds Receive Regulatory Approval in El Salvador
    11:24
    World’s First Bitcoin Bonds Receive Regulatory Approval in El Salvador
  • World’s First Bitcoin Bonds Receive Regulatory Approval in El Salvador
    11:24
    World’s First Bitcoin Bonds Receive Regulatory Approval in El Salvador
  • What's Next for 'Razzlekhan' and Her Husband After Bitfinex Guilty Plea?
    04:51
    What's Next for 'Razzlekhan' and Her Husband After Bitfinex Guilty Plea?
  • iFinex applied for subpoenas in Colorado, Arizona and Georgia in April, but the U.S. District Court of Georgia recently denied its request due to filing errors.

    A federal judge did grant iFinex’s application in Arizona in April and the third subpoena filing in Colorado, for a different bank, was granted last month.

    According to  the court ruling filed June 8 in Georgia, Magistrate Judge Alan J. Baverman said the bank iFinex is trying to subpoena merged with another financial institution and is now based in North Carolina. As such, the Georgia court does not hold jurisdiction over the exchange’s petition.

    Moreover, for reasons unknown, iFinex named Citibank in its petition rather than the intended SunTrust Bank, which merged with Branch Banking and Trust Company (BB&T) to form Truist Bank in December 2019.

    "[It] appears that Applicant ... has filed its petition in the wrong district. Even if Applicant had shown that SunTrust Bank still exists and is headquartered or otherwise 'resides' or 'is found' in this district, the petition would still be due to be denied as the proposed subpoena is addressed not to SunTrust Bank (or Truist Bank) but instead to Citibank,” Judge Baverman wrote.

    The missing funds were first made public by the New York Attorney General’s office which alleged that Bitfinex lost the $850 million and later used a secret loan from affiliated stablecoin issuer Tether to secretly cover the shortfall.

    In addition to filing its petition in the wrong district and naming the wrong bank, iFinex also failed to present relevant supporting evidence to the court. Lastly, the judge concluded that a lack of clarity on the time frame of the subpoena meant it was “unduly intrusive and burdensome."

    The various state subpoena applications follow an initial subpoena request in October 2019, filed in California, where the exchange sought testimony from a former TCA Bancorp executive about Crypto Capital’s accounts. This subpoena was later granted.

    See the Georgia court ruling in full below:

    Disclosure

    Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

    CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.