Since the February 24, start of invasion of Ukraine, Russian ruble has plummeted and corrected itself multiple times.
With invasion came the sanctions too - with multiple companies, banks and individuals getting punished, with the intention to destabilize the Russian officials and oligarchs, hence, hurting the war effort.
Of course, as it is always the case, Russians found the solution to get what they want, and in this case, it was – crypto.
Evidence shows that Russian cryptocurrency transactions have been increasing in both number and value since the start of the invasion, the scale suggests buyers are ordinary Russians seeking to hold on to their savings as the value of the ruble crashed. Although, there is evidence for a different case scenario.
One on the main concerns in the past two years was if Russian oligarchs can bypass the sanctions imposed on them (and Russian banks) by using cryptocurrency. Western governments did take some steps to try and stop them. But not all companies are built the same or treated the same.
A legitimate reason for concern should be raised about the company SoftSwiss and its CEO and founder Ivan Montik, and his involvement in money laundering. Or rather, a small million of companies that are, in one way or another, part of SoftSwiss.
Holder of several companies in Malta, Cyprus, Poland, Estonia, he is best known for being the head of SoftSwiss, an entity based in Curacao, offering a complete software solution for the opening of online casinos. Fervent follower of crypto-currencies and the blockchain, his company also offers a turnkey solution allowing to open casinos accepting bets in Bitcoin and other cryptocurrencies.
First real reason for concern comes from years back when Montik was a central figure in a project called OFFERZONE. It was a project imagined as a peer-to-peer blockchain solution, which would gather its funding from the Initial Coin Offering (ICO). OFFERZONE raised 10 to 15 million euros and that’s where the story ends. No one knows where the money went, only known thing is that the offerzone.io website existed until recently, and while it was up it redirected to Dutch page promoting online crypto casinos.
Most of the casinos mentioned on the Dutch webpage are owned by N1 Interactive, a Maltese company, which also has Montik as one of the major shareholders.
SoftSwiss is well structured as legitimate business front and serves as good alibi story for Montik, but aside from it he is involved with various companies dealing in gambling and crypto, most notable being Merkeleon and CoinsPaid. Depending on the source, some claim that DAMA NV owns SoftSwiss, others that Skylock Investments have a major stake. In any case, all of companies mentioned and numerous others interconnect in a great web of successful businesses all across Europe, with the same group of individuals serving as executive members, that sometimes it’s very hard to keep track of everything.
But maybe it’s that way purposely.
Businessman such as him has a lot of powerful friends, and even though he is relatively known in his sphere of influence, some of his partners are quite famous in certain parts of Europe.
Austrian company Merkeleon that specializes in software development and crypto exchanges, with offices in Poland, has Ivan Montik as a co-founder and Alexander Riedinger as a director, with Max Krupyshev as acting CEO. Merkeleon, despite representing themselves as Austrian company, operate from Warsaw.
To make things even weirder, most of the employees are Belarussians, making Merkeleon a kind of Belarussian colony in Poland. Supposedly, there are more than 500 Belarussian brought to Poland with promise of accommodation and stable job, all after the invasion of Ukraine.
Most of them only operate as a part of Merkeleon, working for other sister companies.
Curious friendships with oligarchs
But, more interestingly the owner of Merkeleon is Semen Lagvinets whose father Victor is quite famous in Belarus.
Back in the 90s, Victor was the supplier of clothes, vehicles, food and construction material for Belarus president, and today is considered to be the 6th richest Belarussian. He was also one of the first businessman to support Lukashenko.
Currently, Victor is based in Moscow, and is the head of the several oil companies. Those mentioned companies are owned and controlled by oligarch Alexey Khotin, also born in Belarus.
Aside from oil companies, Khotin owns several businesses, most notably Four Seasons in Moscow and Yugra Bank. He is infamous for serving the interests of senior Belarussian officials and is suspected to be the direct connection between Lukaschenko and Russia.
Of course, Khotin and Lagvinets are both sanctioned.
Ivan Montik has some powerful friends in Russia too. Despite deleting all the evidence online, Russian oligarchs Roland Isaev and Paata Gamgoneishvillli are both heavily involved in SoftSwiss and their sister companies, either as directors and/or board members. The Russian duo owns company Patero Development in Russia, which is responsible for construction of several luxury malls in Moscow.
Both oligarchs were sanctioned after invasion started, but besides that they were heavily involved in multiple scandals over the years, including money laundering, with their names appearing in Panama papers and Paradise papers.
Pictured above: 1. Roland Isaev 2. Ivan Montik 3. Max Krupyshev 4. Pavel Kashuba. This picture appeared on Ivan Montik’s Facebook, but since than it has been deleted.
Where does it all connects?
The previously mentioned companies like CoinsPaid and Merkeleon, operated by Dream Finance, deal in crypto processing and exchanges. They report record breaking volumes and traffic, but never show any concrete numbers, only the percentages which are saying nothing of essence.
Well, here are some of the numbers according to their auditors Assertum Audit and Crowe DNW.
The sibling company of the CoinsPaid platform, CryptoProcessing.com, also asserts itself as the leading entity in global crypto processing by transaction volume. Which is understandable because they basically the same brand under two different names.
However, an examination of web data for both CoinsPaid and CryptoProcessing reveals discrepancies with their bold claims. Between March and May 2023, there was a notable decline in website traffic for CoinsPaid. In March, the site attracted over 94,000 visitors, but by May, this figure plummeted by nearly 50% to fewer than 42,000.
Notably, the top five countries contributing to this traffic include Russia and Ukraine. In contrast, CryptoProcessing experienced a modest increase in website visitors during the same period. It seems that average transaction at CoinsPaid or CryptoProcessing is significantly higher than that of similar sites.
It’s worth noting that CryptoProccesing is the crypto processor for Pokerdom, an online poker site with 90% of it’s customers coming from Russia and Belarus. Deposits on Pokerdom can be made either via the Russian payment processor Piastrix, or via cryptocurrencies.
Most significant thing we can read from the table is that their turnover explodes after the start of Russian invasion, and even more after sanctions started to land.
Bear in mind, however, that these are numbers related only to Dream Finance OÜ based in Estonia, without its namesakes from Lithuania and El Salvador. Not to mention every other company.
In all probability, those numbers are likely a lot higher, but tend to follow the same pattern of growth at the same time, across all companies.
Unraveling the Intricacies
In light of the extensive details presented, a verdict on the situation involving Ivan Montik and associated entities reveals a complex web of potential illicit activities and connections.
Firstly, Montik's involvement in various businesses, raises concerns, particularly regarding allegations of money laundering stemming from his past involvement with the OFFERZONE project. Furthermore, the intertwining network of companies, including Merkeleon and CoinsPaid, adds another layer of complexity, with connections to individuals like Semen Lagvinets, known for his ties to sanctioned oligarchs in Belarus, and ultimately Lukashenko.
The presence of Belarusian employees in Merkeleon, brought to Poland after the invasion of Ukraine, raises suspicions of exploitation and potential involvement in clandestine activities. Additionally, ties to Russian oligarchs Roland Isaev and Paata Gamgoneishvillli, despite attempts to conceal evidence, hint at deeper connections and potential involvement in illicit practices such as money laundering and association with sanctioned individuals.
The surge in turnover for associated companies following the invasion of Ukraine and subsequent sanctions raises defi mining red flags regarding potential exploitation of geopolitical events for financial gain.
When you summarize it all, you get a clear troubling picture of interconnected businesses with ties to sanctioned individuals and potential involvement in illegal practices, such as money laundering and sanctions bypassing. Further investigation into the matter is warranted to ascertain the extent of these activities and hold accountable those responsible.