Uncover the complexities of CoinsPaid and SoftSwiss Money Laundering operations
Investigative reports by Shana Dovi on Medium have uncovered serious allegations against CoinsPaid, an Austrian cryptocurrency payment processor that operates under Dream Finance OÜ in Estonia
The CoinsPaid Group and Its Network of Entities
Investigative reports by Shana Dovi on Medium have uncovered serious allegations against CoinsPaid, an Austrian cryptocurrency payment processor that operates under Dream Finance OÜ in Estonia. The investigation reveals a complex network of financial misconduct, fraud, and regulatory evasion allegedly orchestrated by the company’s management and shadow stakeholders. Notably, the beneficial owner in Austria is reportedly acting as a front for interests from Belarus.
Overview of CoinsPaid
CoinsPaid functions through various legal entities located in Estonia, Lithuania, and El Salvador. The primary operating entity, Dream Finance OÜ, possesses a cryptocurrency license in Estonia and is managed by Austrian entrepreneur Alexander Horst Riedinger, with Maksim Krupyshev serving as the CEO. Additionally, the Estonian entity also operates another brand known as CryptoProcessing.
Allegations Against CoinsPaid
The allegations against CoinsPaid are serious and multifaceted. Firstly, the company has publicly acknowledged a staggering loss of $37 million due to a hacking incident, which contradicts earlier reports of smaller losses. Despite ongoing operations, there are suggestions of impending bankruptcy, as internal financial assessments indicate significant negative equity.
Moreover, CoinsPaid is accused of laundering hundreds of millions of euros each year, allegedly involving a network of Belarusian expatriates and focusing on offshore and illegal gambling platforms. The company has also been highlighted for its non-compliance with local labor and tax regulations.
In terms of management practices, Maksim Krupyshev, the CEO, is accused of acting as a front for Belarusian operators. There are claims of manipulation of corporate structures to facilitate financial crimes without direct implications for the company. Additionally, the company is said to exploit regulatory loopholes in Estonia and other jurisdictions, establishing front companies to obscure its operations and evade scrutiny.
Whistleblower reports indicate that the risks posed by CoinsPaid could have broader implications for the financial system, reminiscent of previous crises in the cryptocurrency sector. Concerns have also been raised about weak regulatory oversight in Estonia, particularly regarding the renewal of Dream Finance’s license despite existing issues.
The Connection to AlphaPo
Dovi’s investigation has also revealed significant ties between CoinsPaid and another cryptocurrency payment processor, AlphaPo. These connections suggest operational and managerial overlaps that raise concerns about transparency and compliance.
Both companies utilize the same technology and share managerial staff, which could lead to potential conflicts of interest. They also have a common compliance department, further complicating matters of confidentiality. Notably, both entities experienced simultaneous security breaches in July 2023, indicating a deep operational integration. Financially, funds and clients seem to move between CoinsPaid and AlphaPo without appropriate compensation, suggesting internal management of financial flows. Personnel discussions and client onboarding decisions are made collaboratively through shared Slack channels, and while CoinsPaid presents itself as distinct from AlphaPo in official communications, there is an internal acknowledgment of their interconnectedness.
These connections imply a deliberate effort to obscure true ownership and control, potentially facilitating unethical or illegal activities.
Key Individuals Involved
Several individuals associated with CoinsPaid and AlphaPo have been highlighted in the report, indicating their involvement in questionable operations. Alexander Horst Riedinger is identified as the beneficial owner of the CoinsPaid Group. Maksim Krupyshev, the CEO, is alleged to be a front for Belarusian interests. Ivan Montik, a co-founder of CoinsPaid, is also the founder of SoftSwiss. Maksim Trafimovich, Dzmitry Yaikau, Pavel Kashuba served as the former CFO and co-CEO, while Frédéric Hubin was a former board member in Estonia. Svetlana Prussova is noted as the board member of Dream Finance OÜ and head of compliance. Violaine Champetier de Ribes leads public relations for the Baltics, and Hanna Drabysheuskaya handles payments at CoinsPaid. Aliaksei Kuzniatsou is the head of Treasury for both CoinsPaid and AlphaPo, and Maria Akulenko was the former Chief Legal Officer of the CoinsPaid Group.
Business Metrics and Entities
CoinsPaid operates under various trading names, including CoinsPaid, CryptoProcessing, and AlphaPo. Its business activities encompass cryptocurrency exchange, OTC desk services, and high-risk payment processing. The company maintains several domains, such as cryptoprocessing.com, coinspaid.com, and alphapo.net, and is active on social media platforms like LinkedIn, Facebook, Instagram, and Twitter. The legal entities associated with CoinsPaid include Dream Finance OÜ in Estonia, Dream Finance UAB in Lithuania, Dream Finance S.A. in El Salvador, A.R. Merkeleon GmbH in Austria, and Skylock Investments Ltd in Cyprus. The jurisdictions in which it operates include Estonia, Austria, Cyprus, El Salvador, and St. Vincent & The Grenadines, with an authorization from the FIU crypto license numbered FVT000166.
Implications of the Allegations
The allegations against CoinsPaid and its connections to AlphaPo raise significant concerns about the integrity of the cryptocurrency payment processing industry. If proven true, these claims could have far-reaching implications not only for the companies involved but also for the broader financial ecosystem. The potential for money laundering and regulatory evasion undermines trust in cryptocurrency as a legitimate financial tool and could lead to increased scrutiny from regulators worldwide.
Regulatory Response and Future Outlook
In light of these serious allegations, regulatory bodies may be prompted to take a closer look at CoinsPaid and AlphaPo, as well as other entities operating in the cryptocurrency space. This could result in stricter regulations and oversight, particularly in jurisdictions like Estonia, where the current regulatory framework has been criticized for its leniency. The ongoing investigations may lead to legal actions against the companies and their executives, potentially resulting in significant financial penalties and operational restrictions.
The future of CoinsPaid and AlphaPo hangs in the balance as these investigations unfold. Stakeholders, including investors, clients, and regulatory authorities, will be closely monitoring developments. The outcome of these inquiries could reshape the landscape of cryptocurrency payment processing, influencing how companies operate and comply with regulations moving forward.
Conclusion
The revelations surrounding CoinsPaid and its alleged misconduct highlight the vulnerabilities within the cryptocurrency industry. As the sector continues to evolve, the need for robust regulatory frameworks and transparent business practices becomes increasingly critical. The connections between CoinsPaid and AlphaPo further complicate the narrative, suggesting a need for greater scrutiny and accountability in the industry. Stakeholders must remain vigilant as the situation develops, ensuring that ethical standards are upheld and that the integrity of the financial system is protected.
