Cryptocurrency exchange WhiteBIT: who is behind the ’pound-owner’?

Cryptocurrency exchange WhiteBIT: who is behind the ’pound-owner’?

Successful Ukrainian startup involves adepts of the ’russian world’ and possibly hostile intelligence services.

Can companies even have the slightest suspicion of collaborating with an aggressor country operate in Ukraine? The question is rhetorical. However, businesses with Russian roots persistently seek ways to remain in the Ukrainian market. Moreover, under a Ukrainian facade, hostile intelligence services may attempt to operate. One example is the cryptocurrency exchange WhiteBIT, which allegedly belongs to a Ukrainian businessman and even collaborates with the Ukrainian government.

But if you start unraveling the web of opaque ownership, you’ll find threads leading not only to pro-Russian politicians but also to the GRU of the Russian Federation and sponsors of the war against Ukraine, writes in his column Vitaliy Kulyk, director of the Center for Civil Society Problems Research.

Recently, the British publication Cryptointelligence published an article presenting interesting facts about the cryptocurrency exchange WhiteBIT, whose figure and owner is considered to be Volodymyr Nosov from Kharkiv.

This is probably the most famous among Ukrainian cryptocurrency exchanges, which actively invests in its own promotion, even at the highest levels. For example, WhiteBIT had joint projects with the Ukrainian Ministry of Foreign Affairs, oriented towards supporting Ukrainian refugees. As noted by the British publication, through this exchange, the Ministry of Digital Transformation launched a free ’literacy learning’ program to educate the public on cryptocurrency literacy.

But collaboration with governmental bodies is not the only PR channel for WhiteBIT. This cryptocurrency exchange sponsors sports clubs and events. After the full-scale invasion of the aggressors, it became a sponsor of the Turkish soccer club Trabzonspor, paying 4.5 million euros for the logo on players’ jerseys. Similar agreements were made with the Spanish Barcelona, and more recently, with the Ukrainian national football team.

The generous investments in advertising are likely intended to position this cryptocurrency exchange as a progressive Ukrainian startup. But is it truly Ukrainian? And is this activity a smokescreen for entirely different affairs?

A closer look at the ownership structure allows for a substantiated assumption that pro-Russian politicians and even Russian intelligence services may be hiding behind the scenes of the cryptocurrency exchange.

Real Owners

According to information from the British publication, the real owner of the key and oldest company in the WhiteBIT group, the Estonian Whitebit Financial Company (now called R&D Sprint Effective), is not Volodymyr Nosov, but Mykyta Shentsev, a former deputy of the Kharkiv City Council and Kharkiv Regional Council, a ’regional’ and son of the still-known ’regional’, MP Dmytro Shentsev.

The Estonian commercial register confirms this fact – until March 2, 2023, Mykyta Shentsev was indeed among the founders of the WhiteBIT exchange from the year of its establishment. It is known for a fact that his share in the Estonian company was constantly growing, and as of March 1st this year, he controlled 51% of the company. To view this information, you need to register on the website of the Estonian register and click the ’History’ button. But for convenience, we leave a screenshot:

It can also be confirmed that R&D SPRINT EFFECTIVE OÜ was previously named Whitebit Financial Company OÜ.

At the beginning of March this year, both Mykyta Shentsev and Mariia Repeshko, linked to him through a joint company, suddenly transferred their parts to Volodymyr Nosov, and the company changed its name to R&D Sprint Effective (however, the email remained the old one, with the whitebit login).

It can be assumed that the deputy decided to re-register the share after information that the largest cryptocurrency exchange in Europe belonged to him started leaking into the public domain.

Since 2010, Mykyta Shentsev was a deputy of the Kharkiv City Council, Kharkiv Regional Council – initially from the Party of Regions, later from OPFL. In 2019, he filed an application for holding the ’Immortal Regiment’ action. Mykyta is the son of Dmytro Shentsev, a former MP from OPFL. Both relinquished their deputy mandates during the full-scale invasion – father in September 2022, son in February 2023.

Mykyta and Dmytro Shentsev

Dmytro Shentsev can be called a model pro-Russian politician. He led in 2010 the ’anti-fascist forum’ with propaganda rhetoric that virtually does not differ from the rhetoric of modern Russia. In 2013, he received a medal from Putin for ’popularizing the Russian language and culture’ in Ukraine. On January 16, 2014, he voted for dictatorial laws that intended to destroy the Maidan, broadcasted the narrative about the ’Odesa tragedy on May 2, 2014’, and in 2018 voted against the law on Ukrainian sovereignty in the ORDLO territories.

Russian GRU and Montenegro Coup

According to the Cryptointelligence publication, part of the ownership structure of the WhiteBIT cryptocurrency exchange includes the company Coddan Nominee. It is part of a sprawling offshore network and was among the founders of another company – Sofbiz.

According to a journalistic investigation, it is suspected of financing the 2016 state coup in Montenegro. The law enforcement agencies of this country found that 1.5 million euros invested in the Sofbiz coup were to go for the assassination of the then prime minister, and later Montenegrin President Milo Dukanovic. This politician sought the country’s entry into NATO.

Investigations by Bellingcat and its Russian partner The Insider proved that Russian General Staff GRU officers Eduard Shishmakov and Vladimir Moiseev were involved in the Montenegro coup.

They worked with pro-Russian politicians in Montenegro and brought in Serbian nationals.

But even when it was proven that Coddan was related to the attempted coup in Montenegro, the company was not liquidated, and several years later, appeared among the founders of the WhiteBIT cryptocurrency exchange. Which is closely associated with pro-Russian politicians in Ukraine.

Why is this important? Cryptocurrency mechanisms are now actively used by Russians because regular financial transaction methods are extraordinarily complicated for them due to international sanctions.

Estonian financial publication ’Business News’ recently highlighted an interesting nuance in WhiteBIT’s activities.

As stated in the Estonian media’s publication, this cryptocurrency exchange is attributed to helping withdraw funds from the Russian cryptocurrency exchange BTC-e. The founder of the latter, Russian citizen Aleksandr Vinnik, was extradited to the United States in the summer of 2022 on suspicion of money laundering to the tune of $4 billion.

The exchange’s finances remained stagnant for a long time but in March 2023 unusual manipulations began. IT journalists noticed that money from the Russian exchange was being broken down into small amounts and withdrawn from various services. Specifically, about 12 million US dollars allegedly went under the guise of a Ukrainian startup.

WhiteBIT’s connection with the pro-Russian fifth column, strange transactions that are already catching the international press’s attention, and a non-transparent ownership structure with potential direct relations to the Russian GRU – seem like more than sufficient arguments for at least a thorough investigation by the law enforcement of warring Ukraine.

Moreover, users of the cryptocurrency exchange’s services, who unknowingly hope for the anonymity of their transactions, may unknowingly surrender their data directly to Russian military intelligence.

As for the Russians, it is entirely in the spirit of their so-called ’special operations’ to cover themselves with the brand of an allegedly Ukrainian startup, invest in its promotion, and behind this facade hide money and finance their dark deeds against the entire civilized world and Ukraine itself.