Supposed “shadow banker” might plead guilty on operating unlicensed money transmissions

Supposed “shadow banker” might plead guilty on operating unlicensed money transmissions
Written by:
Ali Raza
18th January, 12:53
Updated: 11th March, 09:07
  • The case against alleged 'shadow banker,' Reginald Fowler, recently saw a major turning point, when his plea was changed from not guilty to guilty.
  • As of yet, the move has yet to be finalized, but Fowler confirmed that he is aware of what he is doing and how it will affect his case.
  • Fowler was accused of conspiring and performing unlicensed money transmissions on behalf of some of the largest crypto exchanges, including Binance, BitMEX, Kraken, and others.

According to recent reports, Reginald Fowler — a supposed ‘shadow banker’ for crypto exchanges — might be close to pleading guilty to operating unlicensed money transmissions. Fowler was previously arrested in April 2019, alongside Ravid Yosef.

Both individuals were accused of running a shadow bank, which processed millions of dollars in unlicensed transactions. The charges against the two claim that they did so on behalf of various digital currency exchanges.

Now, according to a report published by Inner City Press, Fowler might be moving toward a guilty plea. The report states that Fowler was present during the hearing in regard to the change of plea. However, he did not object when Judge Carter announced that the plea would be changed from not guilty to guilty.

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Fowler’s clients included some of the world’s largest crypto exchanges

Fowler’s payment processing firm, Crypto Capital, allegedly also had several major clients, including the likes of BitMEX, Binance, Bitfinex, and Kraken. The so-called ‘shadow banking’ transactions that Fowler was allegedly performing circumvented AML and KYC procedures.

Some reports claim that Bitfinex even entrusted over $800 million to the company, and then lost access to the money during a dispute. Another well-known crypto exchange that entrusted its clients’ funds to Crypto Capital was Canadian QuadrigaCX. The exchange made headlines when its CEO mysteriously died last year, leaving all of the exchange’s wallets permanently locked, and funds within them inaccessible.

As for Fowler himself, he was arrested in April last year and then charged with four crimes, including conspiracy to commit bank fraud, conspiracy to operate unlicensed money transmission business, committing bank fraud, and operating an unlicensed money transmission business. As for the company’s other co-founder, Israeli national Ravid Yosef, he was charged as well, although he was not arrested.

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