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It’s rumoured that Deltec, a Bahamas-based bank popular with crypto clients, is linked to a fraud scheme involving shell companies. The US federal agency seized crypto funds worth $58 million from a Bahamian bank account.
Deltec Bank and Trust were based in the Bahamas, whose funds were seized in the Eastern District of Virginia last month. Money laundering, wire fraud, extortion, and bank fraud are suspected uses of this account by bad actors. There is a cross-border scheme implicating Deltec customers. Fraudulent cryptocurrency websites are allegedly used to fool victims into depositing funds and assets.
According to reports, the websites promised victims high returns, but when they tried to withdraw their funds, they could not. Deltec refused to give Mitsubishi Bank information regarding the shell companies.
At least 74 shell companies committed wire fraud, law enforcement reported. Before transferring the funds to Bahamas accounts, funds were traced to custodial accounts. Two in particular, Axis Digital Limited and GTAL, were apparently unable to be identified by law enforcement.
Banks are required by KYC and AML laws to verify customers’ identities in the United States. The goal is to facilitate the assessment of money laundering risks and the reporting of suspicious transactions by financial institutions and law enforcement.
Cryptocurrencies and digital assets are not the first time they have been used in crime. Due to the decentralisation and pseudonymity of crypto transactions, it becomes harder to identify and trace the parties who engage in illegal activities.
The majority of crypto users are law-abiding and honest. Despite these characteristics, criminals struggle to resist them. Those who oppose cryptocurrency can use such scams as ammunition. Recently, Ben McKenzie, an American actor, author and commentator, got a second chance to revive his career as Ryan Atwood, the star of The O.C., except he focused on critiquing cryptocurrency.
McKenzie has collaborated with Jacob Silverman, freelance journalist and book writer FTX podcast, on several articles criticising digital assets, and now they have written a book together. Since at least 2021, the 44-year-old actor has been fighting against this technology. The actor gave an extended explanation of his criticisms on CNBC’s Squawkbox on July 18th. He said, “My biggest concern is regular people who have lost a lot of money. Cryptocurrency, the market, closely resembles a Ponzi scheme… 99% of people lose, and the 1% benefit. In crypto, it would be the exchange owners, the VC firms. It would be the people who issue the coins.”