In an effort to recover $2.7 million, reportedly frozen in Citibank and Bank of America accounts, the cryptocurrency exchange Bitstamp has filed a motion in a U.S. district court in New York to compel witnesses from the two financial institutions to testify.
Bitstamp is suing Copenhagen-based processor CNG Processing. It had previously been tasked with handling domestic and international transfers on behalf of the platform’s clients.
“CNG Processing opened accounts in the U.S. at Citibank and Bank of America after the deadlines set in the agreements. Their use was complicated by limits on deposits and withdrawals, and by restrictions on transfers. This did not conform to [previously reached] agreements,” the exchange said.
Bitstamp terminated its cooperation with CNG Processing, but it could not recover the $1.7 million security deposit and $1 million of client funds. According to the exchange’s lawyers, CNG refuses to return the funds, arguing that they are frozen on Citibank and Bank of America accounts.
“CNG has not produced any documents from Bank of America or Citibank to support its position,” the motion states, citing a lawsuit filed in Denmark in April.
Bitstamp expects that clarifying the accuracy of these statements will influence the trajectory of the dispute between the two companies.
Bitstamp Application by ForkLog on Scribd
On Twitter, Bitstamp declined to comment on the legal proceedings, adding that it has not worked with CNG for more than a year. The company strongly denied claims that it is having trouble with fiat withdrawals.
The matter relates to a former partner of Bitstamp and we have not used their services in over a year. We’re unable to comment on ongoing legal proceedings, however we can categorically state that we are processing fiat withdrawals.
— Bitstamp (@Bitstamp) November 17, 2020
Bitstamp is also is a defendant in a dispute with Canadian investor Salim Sater, who filed suit against the exchange over its actions following the 2017 Bitcoin Cash hard fork.
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