Investigative Report: Allegations of Money-Laundering, Tax Fraud, and Compliance Issues Against Crypto Payment Processor CoinsPaid.

tamir
Thu, 09 May 2024 09:29:33 +0000
Crypto Payments, ticker, A.R. Merkeleon, Alexander Horst Riedinger, Aliaksei Kuzniatsou, AlphaPo, Andrei Koposov, CoinsPaid, Cryptoprocessing, Dream Finance, Frederic Georges Hubin, Hanna Darysheuskaya, Ivan Montik, Maksym Krupyshev, Maria Akulenko, Pavel Kashuba, Skylock Investments, Svetlana Prussova, Violaine Champetier de Ribes Christofle

Investigative reports published by Shana Dovi on Medium has raised serious allegations against CoinsPaid, an Austrian crypto payment processor operated under Dream Finance OÜ via Estonia. The report outlines a complex scenario of financial misconduct, fraud, and regulatory evasion allegedly orchestrated by the company’s management and its shadow stakeholders. Allegedly, the Austrian beneficial owner is only a frontman for the Belarussian people.

Short CoinsPaid Narrative

Crypto payment processor CoinsPaid operates through legal entities in Estonia, Lithuania, and El Salvador. Dream Finance OÜ, the operating entity holding a crypto license in Estonia, is controlled by Austrian entrepreneur Alexander Horst Riedinger and led by Max Krupyshev as CEO. CryptoProcessing is another brand also operated by the Estonian entity.

Key Allegations Against CoinsPaid:

1. Financial Misconduct and Bankruptcy: The report details how CoinsPaid publicly acknowledged a loss of $37 million due to a hack, contradicting earlier lesser figures. This discrepancy has led to suggestions that the company may actually be bankrupt, continuing operations despite impressive negative equity revealed by internal financial assessments.

2. Involvement in Money Laundering: CoinsPaid is accused of laundering hundreds of millions of euros annually. The operation allegedly involves a network of Belarusian expatriates and extends across multiple European countries, primarily servicing offshore and illegal gambling platforms. The lack of stringent local labor and tax regulation adherence is also highlighted.

3. Dubious Management Practices: The report implicates Maksim Krupyshev, a Ukrainian crypto influencer and the CEO and face of CoinsPaid, as the central figure in these activities. It suggests that Krupyshev is likely a front for Belarusian interests who are the true operators behind the scenes. Allegations include the manipulation of corporate structures to facilitate financial crimes without implicating the official business.

4. Regulatory Evasion and Compliance Issues: CoinsPaid is reported to operate under the guise of compliance while engaging in activities that contravene both financial and corporate governance norms. This includes the establishment of front companies and the exploitation of regulatory loopholes in various jurisdictions, including Estonia, where the firm is licensed.

5. Impact and Scope of Operations: The whistleblower’s revelations point to a broader contagion risk within the financial system, similar to previous crises in the crypto sector. The detailed involvement of Estonian authorities, who have ostensibly renewed Dream Finance’s license despite these issues, raises questions about regulatory oversight and enforcement.

The Hidden AlphaPo Connection

The Shana Dovi Reports highlights a significant and intricate connection between CoinsPaid and another offshore crypto payment processor, AlphaPo, pointing to a deep operational and managerial overlap that suggests both entities function more as a single unit than as separate companies. Here are the key points of connection as outlined in the report:

1. Shared Technology and Management: The investigation reveals that CoinsPaid and AlphaPo not only use the same technology but are also managed by the same group of individuals. This operational overlap indicates that the two entities are effectively run as one, despite outward appearances.

2. Common Compliance Department: Both CoinsPaid and AlphaPo share a compliance department, which is a major red flag for potential conflicts of interest and breaches in confidentiality. This shared department indicates a level of integration that goes beyond mere partnership or client-provider relationships.

3. Simultaneous Security Breaches: The report notes that both CoinsPaid and AlphaPo were affected by a hack simultaneously in July 2023. The coordination required to manage the aftermath of such a simultaneous hack further suggests a close operational linkage.

4. Financial Interdependence: The whistleblower notes that there is a financial interdependence between the two entities. Funds and clients seem to be moved between CoinsPaid and AlphaPo without proper financial compensation or transparency, indicating that financial flows between the two are managed internally as if they were one entity.

5. Shared Personnel and Slack Channels: Personnel matters are discussed in a shared context, with a Slack channel dedicated to discussing whether a client should be onboarded to CoinsPaid or AlphaPo. After the July 2023 hack that the address used to pay the CoinsPaid employees was actually receiving its funds from AlphaPo. This shows that there is no clear operational boundary between the two and decisions regarding client management are made jointly.

6. Fronting Allegations: The report alleges that CoinsPaid presents itself as separate from AlphaPo in official narratives to external parties, including authorities, yet internally, it is acknowledged that they are the same. This dual narrative is used to mislead regulators and other stakeholders about their true relationship and operations.

These connections imply a significant lack of transparency in the operations of both CoinsPaid and AlphaPo, with potential implications for legal compliance, regulatory scrutiny, and the integrity of their business operations. The whistleblower’s revelations suggest that the relationship between CoinsPaid and AlphaPo is structured to obfuscate true ownership and control, facilitating potentially illegal or unethical activities under the guise of separation.

The Involved Individuals

Accordint to the report, several individuals associated with CoinsPaid and AlphaPo, highlighting their roles and involvement in the operations of these entities. Here are the names and roles as outlined in the report:

1. Alexander Horst Riedinger: This is officially the beneficial owner (UBO) of the CoinsPaid Group. However, according to reports, he is only a frontman for the Belarusian owners.

2. Maksim Krupyshev – Referred to as the face of CoinsPaid and a Ukrainian crypto influencer. He is identified as the CEO of CoinsPaid and is suggested to be managing the company primarily for a network of Belarusian backers. He also manages AlphaPo LLC, another entity mentioned in the report.

3. Ivan Montik: he seems to be a key person in the CoinsPaid network. On his personal website, he bills himself as the co-founder of CoinsPaid, the founder of SoftSwiss and Merkeleon (beneficially owned by the Austrian Alexander Riedinger).

4. Pavel Kashuba – Referred to with the nickname “Pasha,” he was the CFO and co-CEO of CoinsPaid until his departure, which coincided with the publication of revelations about CoinsPaid.

5. Frédéric Hubin – Mentioned as having been introduced to Krupyshev through a Ukrainian friend and subsequently offered the position of local board member in Estonia for CoinsPaid. He resigned in April 2023. His role included compliance with new regulatory requirements in Estonia.

6. Svetlana Prussova – Described as a board member of Dream Finance OÜ, the legal entity operating CoinsPaid in Estonia. She is indicated to have compliance responsibilities and is privy to the overlapping operations of CoinsPaid and AlphaPo.

7. Violaine Champetier de Ribes Christofle – Identified as heading public relations for the Baltics at CoinsPaid. She, along with Prussova, is mentioned in the context of receiving dubious tax-free crypto payments directly from an offshore structure.

8. Hanna Drabysheuskaya – Described as one of the individuals responsible for handling payments at CoinsPaid.

9. Aliaksei Kuzniatsou – Noted as the Head of Treasury at CoinsPaid and AlphaPo, involved in the payment processes and possibly aware of the money laundering operations.

10. Maria Akulenko: former Chief Legal Officer of the CoinsPaid Group.

These individuals are depicted as key players within the organizational structure of CoinsPaid and AlphaPo, with roles that range from executive management to specific operational tasks such as treasury and compliance.

Key Data CoinsPaid

Trading names

CoinsPaid
CryptoProcessing
AlphaPo

Business activity

Crypto exchange & OTC desk operator
High-Risk crypto payment processor

Domains

https://cryptoprocessing.com
https://coinspaid.com
https://alphapo.net

Social media

LinkedIn, Facebook, Instagram,
Twitter

Legal entities

Dream Finance OÜ (Estonia)
Dream Finance UAB (Lithuania)
Dream Finance S.A. (El Salvador)
A.R. Merkeleon GmbH (AT)
Skylock Investments Ltd (CY)

Jurisdictions

Estonia, Austria, Cyprus,
El Salvador, St. Vincent & The Grenadines

Authorization | FIU crypto license no FVT000166

Related individuals

Alexander Horst Riedinger, Austria (LinkedIn)
Ivan Montik (personal website)
Pavel Kashuba
Maksym Krupyshev, Ukraine (LinkedIn)
Andrei Koposov, Georgia (LinkedIn)
Frédéric Georges Hubin
Svetlana Prussova
Violaine Champetier de Ribes Christofle
Hanna Drabysheuskaya
Aliaksei Kuzniatsou
Maria Akulenko

PayRate42 rating | Orange Compliance (profile)

Request for Information:

FinTelegram urges readers who may have further information about CoinsPaid or any associated operations to come forward and share their insights. Our whistleblower platform, Whistle42, is designed to protect the identities of informants while helping to uncover and report on financial malpractices that may affect the integrity of the crypto and financial markets.

This ongoing series aims to dissect and understand the layered complexities behind CoinsPaid’s operations, the roles of its key operators, and the implications of their actions on investors and the broader financial system. Your contributions are invaluable in pursuing transparency and accountability within the cryptocurrency industry.