Reggie Fowler Gets Over 6 Years for Crypto Scheme, Ordered to Forfeit $740M
The former part owner of the Minnesota Vikings misled a number of banks to process hundreds of millions of dollars of illicit crypto transactions
alexeisido/Shutterstock modified by Blockworks
US federal prosecutors got their way in the Reginald Fowler case, with a New York judge imposing an approximately six-year prison term on the convicted crypto fraudster.
Fowler’s sentence stemmed from the fact that he “evaded federal law by processing hundreds of millions of dollars of unregulated transactions on behalf of cryptocurrency exchanges as a shadow bank,” US Attorney Damian Williams said in a statement on Monday.
Prosecutors in April pushed for a seven-year prison term, plus fines amounting to over $720 million.
The bank fraud is tied to Fowler’s time running Global Trading Solutions (GTS). The former Minnesota Vikings minority owner pleaded guilty last April to lying to banks in order to process more than $700 million in “unregulated” crypto transactions, the Southern District of New York said in a statement.
“Fowler evaded federal law by processing hundreds of millions of dollars of unregulated transactions on behalf of cryptocurrency exchanges as a shadow bank,” Williams said. “He did so by lying to legitimate U.S. financial institutions, which exposed the U.S. financial system to serious risk.”
The shadow bank, Crypto Capital Corp, was established to process transactions for crypto startups operating by choice or necessity outside of the traditional banking system.
Bitfinex was also wrapped up with Crypto Capital, giving the payment processing firm $850 million to process customer withdrawals. New York Attorney General Letitia James alleged in 2021 that Tether loaned Bitfinex the $850 million to cover the loss.
Prosecutors said Fowler personally opened dozens of accounts that processed crypto transactions without the knowledge of the banks involved.
Fowler has been ordered to forfeit $740.2 million of the proceeds.
Get the news in your inbox. Explore Blockworks newsletters:
- Blockworks Daily: The newsletter that helps thousands of investors understand crypto and the markets, by Byron Gilliam.
- Empire: Start your morning with the top news and analysis to inform your day in crypto.
- Forward Guidance: Reporting and analysis on the growing intersection of crypto and macroeconomics, policy and finance.
- 0xResearch: Alpha directly in your inbox. Market highlights, data, degen trade ideas, governance updates, token performance and more.
- Lightspeed: Built for Solana investors, developers and community members. The latest from one of crypto’s hottest networks.
- The Drop: For crypto collectors and traders, covering apps, games, memes and more.
- Supply Shock: Tracking Bitcoin’s rise from internet plaything worth less than a penny to global phenomenon disrupting money as we know it.
