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Unraveling the CoinsPaid Group and Its Alleged Misconduct: A Closer Look at CoinsPaid and AlphaPo

Investigative reports by Shana Dovi on Medium have unveiled serious allegations against CoinsPaid, an Austrian crypto payment processor operating under Dream Finance OÜ in Estonia. The investigation outlines a complex web of financial misconduct, fraud, and regulatory evasion allegedly orchestrated by the company’s management and shadow stakeholders. Notably, the Austrian beneficial owner is reportedly a frontman for Belarusian interests, raising significant concerns about the integrity of the operations.

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A Comprehensive Overview of CoinsPaid

CoinsPaid operates through a network of legal entities in Estonia, Lithuania, and El Salvador. Its 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. Another associated brand, CryptoProcessing, is also managed by the Estonian entity, further complicating the corporate structure.

Key Allegations Against CoinsPaid

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. This discrepancy raises questions about the transparency of their financial reporting.
   • There are suggestions of impending bankruptcy despite ongoing operations, as internal financial assessments reveal significant negative equity, indicating potential insolvency.
2. Involvement in Money Laundering:
   • CoinsPaid is accused of laundering hundreds of millions of euros annually, with operations allegedly involving a network of Belarusian expatriates focused on offshore and illegal gambling platforms.
   • The company has been highlighted for non-compliance with local labor and tax regulations, further complicating its legal standing.
3. Dubious Management Practices:
   • Maksim Krupyshev, a Ukrainian crypto influencer and CEO of CoinsPaid, is accused of acting as a front for Belarusian operators, manipulating 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 avoid scrutiny from authorities.
5. Impact and Scope of Operations:
   • Whistleblower reports suggest that the risks posed by CoinsPaid to the financial system are akin to previous crises in the crypto sector, highlighting the need for stronger regulatory oversight.
   • Allegations of weak regulatory oversight in Estonia are concerning, especially given the renewal of Dream Finance’s license despite ongoing issues.

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The Hidden Connection to AlphaPo

Shana Dovi’s investigation reveals significant connections between CoinsPaid and another crypto payment processor, AlphaPo. These links suggest operational and managerial overlaps, raising serious concerns about transparency and compliance.

Key Points of Connection:

• Shared Technology and Management:
  • Both companies utilize the same technology and share managerial staff, indicating a close operational relationship.
• Common Compliance Department:
  • A shared compliance department raises potential conflicts of interest and confidentiality breaches, further complicating their regulatory standing.
• Simultaneous Security Breaches:
  • Both entities experienced simultaneous hacks in July 2023, suggesting deep operational integration and potential vulnerabilities in their security measures.
• Financial Interdependence:
  • Funds and clients appear to move between CoinsPaid and AlphaPo without proper financial compensation, indicating internal management of financial flows that could mask illicit activities.
• Shared Personnel and Communication Channels:
  • Personnel discussions and client onboarding decisions are made jointly via shared Slack channels, blurring the lines between the two companies.
• Fronting Allegations:
  • While CoinsPaid presents itself as separate from AlphaPo in official narratives, internal communications reportedly acknowledge their unity, suggesting a deliberate effort to obfuscate true ownership and control.

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Key Individuals Involved

The report highlights several individuals associated with CoinsPaid and AlphaPo, whose roles suggest involvement in the companies’ questionable operations:

 

Name	Role
Alexander Horst Riedinger	Beneficial owner of CoinsPaid Group.
Maksim Krupyshev	CEO of CoinsPaid, alleged front for Belarusian interests.
Ivan Montik	Co-founder of CoinsPaid, 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, 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

The operational landscape of CoinsPaid and its associated entities is complex, with various trading names, business activities, and legal structures. Here’s a detailed overview:

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Conclusion: The Implications of the Investigation

The allegations against CoinsPaid and its connections to AlphaPo raise significant concerns about the integrity of their operations and the potential risks they pose to the broader financial ecosystem. The intertwining of management, shared technology, and financial interdependence between these entities suggests a deliberate effort to obscure true ownership and control, potentially facilitating unethical or illegal activities.

As regulatory bodies continue to scrutinize the crypto sector, the findings of Shana Dovi’s investigation may serve as a catalyst for more stringent oversight and enforcement actions. The implications of these allegations extend beyond the companies involved, highlighting the need for greater transparency and accountability in the rapidly evolving world of cryptocurrency and digital finance.

The ongoing developments in this case will be crucial to watch, as they may set precedents for how similar entities are regulated and held accountable in the future.