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Inside money, markets, and Big Tech

This article was published on May 1, 2019

‘Shadow banking’ duo charged for laundering millions of dollars for cryptocurrency exchanges

Unlicensed and illegal

‘Shadow banking’ duo charged for laundering millions of dollars for cryptocurrency exchanges
Matthew Beedham
Story by

Matthew Beedham

Editor, SHIFT by TNW

Matthew is the editor of SHIFT. He likes electric cars, and other things with wheels, wings, or hulls. Matthew is the editor of SHIFT. He likes electric cars, and other things with wheels, wings, or hulls.

The US Attorney for the Southern District of New York has charged two people in connection with running an unlicensed money transfer business used to make deposits for cryptocurrency exchanges.

Reginald Fowler and Ravid Yosef allegedly ran a shadow banking service that “processed hundreds of millions of dollars of unregulated transactions on behalf of cryptocurrency exchanges,” US Attorney Geoffrey Berman said in the announcement. Exactly how much they processed has not been disclosed.

According to court documents, Fowler and Yosef’s business, called Crypto Companies, reportedly misled banks, claiming it was using the accounts for real estate investments. The company was active between February and October last year.

Fowler, of Arizona, and Yosef of Tel Aviv, Israel are both charged with one count of bank fraud and one count of conspiracy to commit bank fraud. Fowler is also charged with operating an unlicensed money exchange.

While Fowler has already been arrested, Yosef remains at large. The pair face a maximum of 30 years in prison if found guilty.

Last year, an American man admitted guilt to running an unlicensed money transmitting business which he used to trade over $3.2 million worth of Bitcoin. He was sentenced to two years in prison earlier this year.

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