The Downfall of 'Shadow Banker' Reggie Fowler and Crypto's Rising Legitimacy

Reginald Fowler is having a existent atrocious time, and it couldn’t person happened to a nicer guy.

A erstwhile starring subordinate successful the operations of “shadow bank” Crypto Capital, Fowler was initially indicted connected charges of banking fraud successful 2019 and additional charges successful 2020. Among the allegations Fowler faces are that he opened U.S. concern banking accounts that helium claimed would beryllium utilized for existent property investing, but were alternatively portion of Crypto Capital’s operations. Fowler, a erstwhile shot subordinate turned investor, faces arsenic overmuch as 70 years successful prison.

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Fowler’s lawyers present accidental helium will plead guilty to charges including slope fraud, ligament fraud and conspiracy, and has asked to forego a trial. The plea does not impact a woody with prosecutors for lighter sentencing. In January of 2020, Fowler was reportedly close to an evident plea deal connected a azygous number of cognition of an unlicensed wealth transmitter, but that woody fell through, reportedly due to the fact that of fiscal issues.

Fowler’s assets were frozen by the Department of Justice pursuing the 2019 indictment, and his fiscal issues bash so look severe. In November, his ineligible counsel withdrew from the case, saying they had not been paid. In treatment astir uncovering caller practice with the justice astatine the time, Fowler said, “I person utilized each my assets. I enactment my properties up for bail. I can't get a slope account. We don't person immoderate income. We can't get to the assets. I privation to find a steadfast that understands that.”

That’s rather a autumn from grace for the concisely high-flying shadiness banker, who joined Crypto Capital successful 2017 and was indicted conscionable 2 years later. During a play erstwhile accepted banking was adjacent much hard for cryptocurrency operations than it is now, Crypto Capital is known to person serviced the exchanges Bitfinex, BitMEX, Kraken and the defunct QuadrigaCX.

But they whitethorn person been up to overmuch more: Crypto Capital laminitis Ivan Manuel Molina Lee was arrested successful Poland, besides successful 2019, connected allegations that Crypto Capital was besides progressive in laundering wealth for cause cartels.

Seemingly successful portion due to the fact that of that small broadside hustle, Crypto Capital coiled up being a precise atrocious crypto shadiness bank. Most notoriously, authorities successful 2019 seized $850 cardinal that Crypto Capital was reportedly holding for Bitfinex. The New York Attorney General aboriginal fined Bitfinex and Tether for trying to fell the losses. QuadrigaCX experienced superior problems with withdrawal delays astatine Crypto Capital, problems seemingly unrelated to different shady dealings astatine the Canadian exchange.

Fowler’s downfall was astir inevitable – not conscionable due to the fact that helium was successful furniture with atrocious people, but due to the fact that helium himself seems abbreviated connected some morals and competence. For instance, Fowler is sometimes described arsenic a “former NFL investor,” but his escapades successful the large leagues were a batch person to slapstick than business. He mislaid his involvement successful the Vikings successful 2014 aft failing to marque payments due to the fact that of problems with his different businesses, according to Minnesota’s Star Tribune. The Tribune besides reports that Fowler lied astir his accomplishments repeatedly, including the bizarre fabrication that helium played successful the Little League World Series.

There’s small crushed to consciousness atrocious for a antheral who helped suffer a batch of radical immense amounts of money, and who whitethorn person abetted convulsive cause cartels. But determination is nevertheless thing tragic successful the story: If they’d done things the close way, Fowler, Molina Lee and the remainder of the Crypto Capital unit would beryllium looking guardant to immense occurrence alternatively of facing lengthy situation stints.

As Fowler awaited trial, regulated banks, astir notably Silvergate, moved aggressively to service cryptocurrency companies, an already ample marketplace that seems poised to proceed growing. Silvergate’s gross doubled successful the archetypal 4th of this year.

Fowler is hardly the lone idiosyncratic who got progressive successful crypto astatine a clip of infinite possibility, past fumbled the container acknowledgment to a premix of ineptitude and short-term greed. He volition apt upwind up successful situation acknowledgment to his atrocious judgement and lackluster character, and helium helped resistance a batch of radical down with him.

It’s a important acquisition for investors and concern operators, peculiarly successful airy of Fowler’s affluent past of lies and screw ups: determination was a clip erstwhile being successful crypto meant sometimes having nary prime but to woody with evidently sketchy characters, but that clip has passed. It’s clip to relegate Reggie Fowler and his ilk to the dustbin of history.

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