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Bitfinex: Upper echelons of exchange’s board sparks debate; compliance cross-over?


ambcrypto.com 20 May 2019 08:50, UTC
Reading time: ~2 m

Bitfinex has not been in the news over the past few months for the right reasons, and an alleged compliance cross-over has brought the cryptocurrency exchange in the spotlight yet again. Ties between the upper echelons of the exchange’s executives and the banking elite have reportedly surfaced.

According to a series of tweets by @run_btc, Peter Warrack, the Chief Compliance Officer at Bitfinex is also appointed by the Royal Bank of Canada. Based on his LinkedIn profile, Warrack has been with the RBC since 2002, first as a Senior Manager Intelligence and then as Head of Investigations, AML Financial Intelligence Unit.

Source: Twitter

Furthermore, the tweet also highlighted the bank’s negative stance on cryptocurrencies. As per an Investopedia article, linked by runbtc, summarizing Canadian’s Banks tryst with the decentralized currency space, the RBC stated that cryptocurrency transactions would be allowed “in limited circumstances.”

The tweet stated:

“Is it strange that the compliance officer for Bitfinex also work for the Royal Bank of Canada (which banned crypto) under the AML department?”

Warrack joined Bitfinex a year ago, in May 2018 with the exchange lauding him as an “expert in major crime investigation and anti-money laundering.” An introductory blog post did mention Warrack’s “senior role,” with both the Royal Bank of Canada [RBC] and the Bank of Montreal.

Interestingly, Tether Limited, the company that operates the largest stablecoin in the world Tether [USDT] owned by the same company that operates Bitfinex i.e. iFinex follows a similar compliance pattern. Only two months after Bitfinex appointed Warrack, Tether followed suit.

Leonardo Real joined Tether Limited in July 2018, as their Chief Compliance Officer. Real, like Warrack, worked in the AML department of a large financial bank in Canada, serving previously as an AML Quality Control Manager at the Bank of Montreal, which has also affirmed its position in opposition to Canada’s growing cryptocurrency industry.

This alleged cross-over from anti-crypto banks to cryptocurrency exchanges, with seemingly prevalent ties, comes weeks after Bitfinex was called out for fraud by the New York Attorney General’s office. As per the NYAG report, the exchange covered up undisclosed losses worth $850 million using their USDT reserves.

Following this debacle, the exchange issued their native tokens LEO, which brought in $1 billion via an initial exchange offering [IEO] within around 10 days of the sale going live.

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