Sanctioned crypto exchange Garantex has ties to violent debt collectors, a convicted gang leader, and a Russian state oil company, according to an international body of journalists.
Estonian newspaper The Eesti Ekspress and the International Consortium of Investigative Journalists (ICIJ) discovered that the death and replacement of one of Garantex’s shareholders precipitated the installation of a new shareholder with links to the Kremlin and Russian state oil.
The probe, published last week, also found that operators of Garantex’s Russia app and crypto educational arm jointly own a debt collection agency alongside a convicted gang leader guilty of violent extortion schemes.
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In addition, Garantex reportedly sent $238 million worth of bitcoin to wallets controlled by illegal darknet operators and $15 million worth of crypto to wallets that Isreal claims are controlled by Hezbollah and Qud Forces, both of which are designated terrorist groups.
Digital forensics analyst Richard Sanders said Russia has an interest in Garentex’s operations, as “the intelligence value that can be obtained by the Russian government far outweighs their desire to prosecute criminals that by and large profit off of what the government considers to be unfriendly nations.”
Garantex links with violent Russian debt collectors
Both Garantex’s crypto educational course, the Garantex Academy, and its Russia-listed mobile app are reportedly operated by Fintech Corporation LLC. The previous director of Garantex Europe, Aleksandr Ntifo-Siao, co-owns Fintech alongside Pavel Karavatsky, a Russian executive with reported links to the Kremlin and Russian state oil company Rosneft.
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It’s reported that Fintech owns 50% of a debt collection agency called Academy of Conflicts alongside convicted gang leader Alexander Tsarapkin. Tsarapkin was previously sentenced for his role in organizing violent extortion schemes as part of a firm called Authority.
In one instance, Authority members stabbed the wife of an indebted businessman with an awl and syringe and members reportedly threatened “to burn her face with acid, blow her up so that her limbs would be torn off, stab her again with an infected needle, and find and deal with the children.”
Academy of Conflicts claims to conduct ‘problem-solving’ activities.
Shareholder’s death suspected as foul play
Tech specialist Stanislav Drugalev and local Moscow politician Sergey Mendeleev founded Garantex in 2019 and were listed in 2021, alongside Ntifo-Siao, as shareholders of the crypto exchange.
However, in February 2021, Drugalev died after driving off a bridge in Dubai. His wife, at the time, suspected the incident was foul play and a ‘criminal death.’ The reported partner of Pavel Karavatsky, Irina Chernyavskaya, later replaced Mendeleev’s role as a Garantex shareholder.
Karavatsky is reportedly a close associate of former FSB general Oleg Feoktisov. The FSB is the state’s successor to the KGB, and Karavatsky reportedly worked at Peresvet Bank while Feoktisov worked as the bank’s presidential advisor. During this time, Russia’s state oil firm Rosneft bought Peresvet Bank. The firm also has reportedly close ties to the FSB.
Revelations that a Garantex affiliate has Russian government and criminal ties raise the concern that the Kremlin is tolerating the exchange or even using it, analysts said.
Yet it might stop others in the industry from doing business with Garantex. https://t.co/kdoWc4RWOF
— ICIJ (@ICIJorg) March 19, 2024
The full report shared by the ICIJ.
Garantex declined to comment on its corporate structure in Russia, its association with Fintech, alleged criminal ties, and Kremlin links when approached by the ICIJ. It said, “Not only do we stay away from facilitating criminal financial activities, but we also do our best to help prevent them.”
The exchange denied involvement with terrorist-designated groups and claims the allegations are “a false accusation based on a misguided analysis of cryptocurrency flows between VASPs based in Gulf countries.” It also declined to comment on the death of Drugalev while Mendeleev declined to answer questions about Garantex from the ICIJ.
Both Garantex operations in Russia and Fintech are reportedly still active.
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