by the investigative journalist Shana Dovi
Money laundering and fraud in the companies Coinspaid and Alphapo.
By criminals Ivan Montik, Pavel Kashuba, Dmitry Yaikov (also known as Dzmitry Yaikau) from Belarus, Roland Isaev, Paata Gamgoneishvili from Russia and Max (Maksim) Krupyshev from Ukraine.
In this fourth article, we head to Switzerland and try to understand where the 2 millions U.S. Dollar illegally raised by Maksim Krupyshev from his German home disappeared in the alpine nation. The CPD Token sale operation was unsupported by Dream Finance OÜ (the legal entity operating the CoinsPaid brand) whereas the investors were led to believe they were actually investing in the CoinsPaid ecosystem.
We will also try to understand if the CPD Foundation is an additional cog in what seems to be an elaborate money laundering operation organized by the Estonian firm. Did the close “friends” of the Belarusians owners of CoinsPaid use the CPD Token sale to get rid of their hot tokens?
This series of investigative articles describes how “Dream Finance OÜ”, an Estonia based company doing business as “CoinsPaid” and managed by the Berlinresident, Ukrainian Crypto Influencer, Maksim Krupyshev, is laundering hundreds of millions of euros per year with the help of a pan-european network of Belarussian expatriates, working for offshore and (mostly) illegal gambling sites while hardly respecting local labor and tax regulations.
Each article will delve in one facet of this well structured criminal endeavor and explain the role of each key character spanning from an old French female aristocrat living in Tallinn and dealing with the company’s public relations to a mythomaniac Belarusian tennis fan based in Cyprus heading the finance department. We will also try to understand why the Estonian authorities, who are well aware of the activities conducted by CoinsPaid, are remaining passive.
ICO and IDO were the hype a couple of years ago. Young start-ups were raising cash by issuing tokens and selling them via various channels to interested parties. In comparison to the traditional way of raising venture capital, these techniques were taking advantage of the strengths of the Web3 technologies and more particularly the possibility to avoid any intermediaries. It was literally possible to start selling tokens against, for example, ether in matters of hours.
Very quickly though, voices from legal experts started sounding the alarm as these ICO/IDO were most of the time not respecting the slightest regulation applicable to this type of operation. Raising investments from the public against what looked to be a share in a company is a heavily regulated activity. Then started a game of cat and mouse between promoters of these new technologies and the regulators.
The “crypto-punk” nature of the Web3 is promoting an idea of freedom and fighting against regulators whereas regulators have been reminding that their mission was mostly to protect the public interest against bad actors. New types of tokens were “invented” to try to avoid their qualification as “security” which wouldtrigger all sorts of red tape in the eyes of these new financiers. Terms like “utility token” or “governance token” were coined in the hope of blurring the lines.
In the beginning of 2021, Maksim Krupyshev was hoping to surf this wave and he and his team were preparing the launch of the CPD Token planned for the summer of the same year. The CPD Token was officially a utility token that would permit any holder of it to pay with it for services offered by CoinsPaid. The token was promoted very aggressively using typical channels such as social networks and launchpads. The public Telegram channel was very active and was promising a “good investment” and “great returns” to its members. Ads in the European press also appeared to push the public to invest in the token. Despite the message given to the public, the CPD Token was not supported by “Dream Finance OÜ” (the company operating the CoinsPaid) as the following page shows:
https://web.archive.org/web/20210924085002/https://coinspaid.com/ido/warning-notice
In fact, the operation was privately conducted by Mr. Krupyshev while clearly pushing forward the connection between the token and CoinsPaid. According to publicly available information, the CoinsPaid IDO was successful and 2.1 millions of U.S. dollars were raised. Unfortunately, since the end of the IDO, the value of the CPD Token has crumbled and is worth virtually nil. It also went through a lot of events ranging from a hack immediately after it was mined to the theft of the CPD Tokens held by CoinsPaid in the recent attacks they company suffered from.
During the summer 2022, a foundation was created in Zug, Switzerland, to promote the CPD Token ecosystem and manage the raised funds. Creating such a structure is a common practice in order to avoid the requalification of the token as a security. Numerous foundations operate in the “Zugger Crypto Valley” with that model. The cash is raised with a token sale, funds are then transferred to a foundation with a precise purpose for the funds.
In the case of the CPD Token, the goal of the foundation “(…) is to promote the development of new technologies and applications, particularly in the area of open and decentralized software architectures and technologies. A particular focus is placed on the promotion, development, maintenance and operation of new technologies and applications in the area of decentralized financial and payment systems.
The focus — but not exclusively — is on the promotion and development of the so-called CPD ecosystem and the distribution and use of the CPD usage token. The purpose of the foundation is also to provide technological and/or financial support to groups, public institutions and private individuals active in the area of decentralized finance and payment systems”.
According to the commerce registry of the Kanton of Zug, the legal entity is managed by a council whose members are already well known to us:
● Mrs. Violaine Champetier de Ribes
● Mr. Frédéric Hubin
● Mr. Maksim Krupyshev
We contacted these three members to request some information about the foundation as not much is available online. Only Mr. Hubin responded to our email but made it very clear that he would not be in a position to comment much as the operations of the foundation are confidential. Indeed, he did not answer any of our questions.
However, according to other information obtained from a person involved in the launch of the CPD Token, the story is much more interesting. “The money raised during the token sale is gone and was never in the control of the foundation. Max spent it without any approval of the foundation council. I don’t think he ever considered asking the foundation anything actually. In his mind, the swiss entity was actually just a gimmick to have a story to tell in case some authorities started to ask questions. It was created after they consulted a lawyer in Germany at the end of 2021 who basically said to them that the ICO was completely illegal. It was Fred who raised alarms during the summer of 2021 when he started seeing the pump and dump operations in the Telegram channel and some ads in Belgian news sites. He went literally ballistic and asked that Maria Akulenko, the Head of Legal at the time, be fired for gross incompetence. When I heard she remained with the company, I understood something was very wrong with CoinsPaid.” our witness told us.
It is important to note that legal entities of the type of the “CPD Foundation” are considered high risk in the financial industry. It is quite counterintuitive for untrained people but it is actually pretty logical as the ultimate beneficial owners are almost impossible to trace. By convention, board (or council in this specific case)members are listed as the UBOs to the authorities. Considering the opacity of the operations of the foundation, one can reasonably start speculating that it had a role in the money laundering operations of CoinsPaid.
Despite this complete lack of transparency and the total loss endured by the buyers of the CPD Token, we could hardly find people complaining about the situation which is puzzling. We would like to draw a parallel with the declaration of a CoinsPaid competitor that we reported in our Episode 1 : if nobody is complaining about the situation despite obvious failure, it might mean that the failure was part of the plan. In our opinion, the CPD Token sale was most probably used to offer some of the “friends” of the real management of CoinsPaid a way to get rid of their hot tokens.