Unraveling the Allegations Against CoinsPaid: A Deep Dive into Financial Misconduct and Regulatory Evasion

Recent investigative reports by Shana Dovi on Medium have brought to light serious allegations against CoinsPaid, an Austrian crypto payment processor operating under Dream Finance OÜ in Estonia. The findings reveal a complex network of financial misconduct, fraud, and regulatory evasion allegedly orchestrated by the company’s management and shadow stakeholders. Notably, the Austrian beneficial owner is purportedly acting as a front for Belarusian interests.

CoinsPaid operates through various legal entities in Estonia, Lithuania, and El Salvador. The primary operating entity, Dream Finance OÜ, holds a crypto license in Estonia and is controlled by Austrian entrepreneur Alexander Horst Riedinger, with Maksim Krupyshev serving as CEO. Additionally, the brand CryptoProcessing is also managed by the Estonian entity.

Key Allegations Against CoinsPaid

The allegations against CoinsPaid encompass several serious issues:

1. Financial Misconduct and Bankruptcy: The company publicly acknowledged a staggering $37 million loss due to a hack, which contradicts earlier reports of smaller figures. Despite ongoing operations, there are suggestions of impending bankruptcy, as internal assessments reveal significant negative equity.
2. Involvement in Money Laundering: CoinsPaid is accused of laundering hundreds of millions of euros annually, allegedly involving a network of Belarusian expatriates and focusing on offshore and illegal gambling platforms. The company has also been highlighted for non-compliance with local labor and tax regulations.
3. Dubious Management Practices: Maksim Krupyshev, a Ukrainian crypto influencer and CEO of CoinsPaid, is accused of acting as a front for Belarusian operators. There are claims of manipulation of corporate structures to facilitate financial crimes without direct corporate implications.
4. Regulatory Evasion and Compliance Issues: The company is said to exploit regulatory loopholes in Estonia and other jurisdictions, establishing front companies to obscure operations and evade scrutiny.
5. Impact and Scope of Operations: Whistleblower reports indicate that the risks posed by CoinsPaid to the financial system are reminiscent of previous crises in the crypto sector. Concerns have been raised about weak regulatory oversight in Estonia, particularly regarding the renewal of Dream Finance’s license despite existing issues.

The Hidden Connection to AlphaPo

Dovi’s investigation also uncovers significant connections between CoinsPaid and another crypto payment processor, AlphaPo. These links suggest operational and managerial overlaps that raise concerns about transparency and compliance.

Key points of connection include:

• Both companies utilize the same technology and share managerial staff.
• They have a common compliance department, which raises potential conflicts of interest and confidentiality breaches.
• Both entities experienced simultaneous security breaches in July 2023, indicating deep operational integration.
• Financial flows between CoinsPaid and AlphaPo appear to move without proper compensation, suggesting internal management of funds.
• Personnel discussions and client onboarding decisions are made jointly through shared communication channels.
• While CoinsPaid presents itself as separate from AlphaPo in official narratives, internal communications acknowledge their unity.

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 are highlighted in the report, suggesting their involvement in questionable operations:

• Alexander Horst Riedinger: Beneficial owner of CoinsPaid Group.
• Maksim Krupyshev: CEO of CoinsPaid, alleged front for Belarusian interests.
• Ivan Montik: Co-founder of CoinsPaid and founder of SoftSwiss.
• Pavel Kashuba: Former CFO and co-CEO of CoinsPaid.
• Frédéric Hubin: Former board member in Estonia for CoinsPaid.
• Svetlana Prussova: Board member of Dream Finance OÜ and compliance head.
• Violaine Champetier de Ribes: Public relations head for the Baltics.
• Hanna Drabysheuskaya: Payments handler at CoinsPaid.
• Aliaksei Kuzniatsou: Head of Treasury at CoinsPaid and AlphaPo.
• Maria Akulenko: Former Chief Legal Officer of CoinsPaid Group.

Business Metrics and Entities

CoinsPaid operates under various trading names, including CoinsPaid, CryptoProcessing, and AlphaPo. Its business activities encompass crypto exchange, OTC desk, and high-risk payment processing. The company maintains several domains and has a presence on social media platforms. Legal entities associated with CoinsPaid include Dream Finance OÜ in Estonia, Dream Finance UAB in Lithuania, and Dream Finance S.A. in El Salvador, among others. The company holds a crypto license from the Financial Intelligence Unit (FIU).

Legal Challenges in the Crypto Sector

SoftSwiss and its associated entities, including CoinsPaid and AlphaPo, have faced numerous allegations of money laundering, sanction evasion, and fraudulent activities. Key individuals involved in these controversies include Ivan Montik, Maksim Krupyshev, Pavel Kashuba, Dmitry Yaikov, Maksim Trafimovich, Roland Yakovlevich Isaev, and Paata Gamgoneishvili. These individuals are at the center of ongoing scrutiny regarding their roles in the alleged misconduct within the crypto processing and online gambling sectors.