Telegram’s Muddy Money

IStories found out that among the investors in Pavel Durov’s cryptocurrency were companies involved in schemes to export coal and metals from the occupied territories of Ukraine. They purchased resources taken from Donbas from Victor Yanukovych’s “purse” linked to Putin’s administration

Pavel Durov launched Telegram in 2013. According to him, he financed the project on his own for several years, but by 2017 it became obvious that the messenger lacked funds to buy servers and to grow. Then Durov came up with the idea to attract investors to Telegram through the launch of the blockchain platform Telegram Open Network (TON) and the sale of the cryptocurrency Gram.

Telegram investors

Durov raised $1.8 billion dollars for the TON project from various foundations and individuals from around the world. Many of them were in one way or another connected with Russia: for example, among the investors were the structures of Roman Abramovich, former minister Mikhail Abyzov, businessman Said Gutseriev and even former Wirecard top manager Jan Marsalek, who is now hiding in Russia, and before that, as The Insider wrote, for many years cooperated with the GRU intelligence agency.

Pavel Durov emphasized that all investors underwent a thorough selection procedure: “Durov could afford to choose and meet only with a select few, as interest in his project was so high,” Forbes Russia wrote.

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A Telegram spokesperson also told IStories that “all investors underwent detailed KYC/AML [Know Your Customer / Anti-money laundering] procedures with leading KYC providers in Europe and Telegram’s European banks. Financial market specialists were engaged in working with investors, while the Telegram team was engaged in the technical development of the project.”

IStories found out that among these “carefully selected and vetted” investors were companies involved in schemes to export coal and metals from the occupied territories of Ukraine.

Yanukovych’s “purse” under the Putin’s administration protection

After Russia de facto occupied part of Southeastern Ukraine in 2014, it took control of significant resources in the Donbas, primarily coal and metals. A fierce fight began over the possibility of exporting these resources to Russia and then selling them abroad, primarily between Kremlin proxies in the occupied territories of the DPR and LPR.

One of the victims of this redistribution, according to the version of the separatists themselves, was the former head of the DPR Alexander Zakharchenko, who was killed in 2018 as a result of a bomb explosion in a Donetsk cafe. “I believe that without the participation of people connected, let’s say, with influential Russian circles, it would have been impossible to eliminate Zakharchenko,” Igor Strelkov-Girkin, who launched the flywheel of war in Ukraine in 2014 with the invasion of Slavyansk, said in an interview with Moskovsky Komsomolets.

Zakharchenko was killed because of “commercial issues and control over gray schemes” for exporting resources from Donbas, Girkin believed. The same version was put forward by the pro-Kremlin publication Baza in 2020, when it published documents of the “black accounting” of Serhiy Kurchenko, who was known in Ukraine as Viktor Yanukovych’s “purse” and, after he fled to Russia in 2013 following his suzerain, became, in fact, a monopolist in the gray schemes of exporting coal and metals from Donbas.

Based on the documents that Baza claimed to have received from people who served with Zakharchenko, as well as law enforcers from Russia and the DPR, Kurchenko’s “schemes” worked simply. Thanks to patronage from the FSB and people from the presidential administration, firms controlled by Kurchenko bought raw materials from Donbas enterprises at a penny price and then exported them abroad, including to the European Union. IStories confirmed the authenticity of data on these foreign trade operations with the help of customs databases.

Among the major buyers of coal and metals exported by Kurchenko from Donbas were companies from the Netherlands Stiron B.V. and ME Property Invest. As IStories managed to find out, these companies are interconnected: ME Property Invest managed Stiron B.V., but their ownership structure is arranged in such a way that it is impossible to find out who actually owns them.

In 2018, Stiron B.V. invested about €10 million in TON — the same amount on average invested by other investors in the project (e.g., Roman Abramovich’s structure). Judging by the accountability, the company received funds for these investments in the form of targeted loans (the money could only be used to purchase tokens) from three other firms - two from the UK and one from the Czech Republic.

These companies have signs of fictitiousness: they are registered to front men from Ukraine, do not own large assets, while millions of euros passed through their accounts. Two of them have already been liquidated, including Commercial Standard Systems from Edinburgh, which, according to Baza, was also involved in Kurchenko’s schemes to export coal from Donbas.

Gram ban and Durov’s trips

In 2019, the US Securities and Exchange Commission (SEC) recognized Gram tokens as securities and banned their issuance due to its issuers’ failure to disclose financial, business and risk information as required by law. The court ordered Pavel Durov to return the money to investors.

At the same time, when Pavel Durov had problems with the U.S. regulator, he began to actively travel to Russia, despite the fact that he had publicly stated several times before that he did not visit his homeland due to pressure from the authorities. In total, according to calculations by IStories, the Telegram founder entered Russia more than 50 times between 2015 and 2021.

Just after one of those visits to Russia in June 2020, Durov signed a settlement agreement with the SEC and pledged to return $1.2 billion to investors and pay a fine of nearly $20 million.

“All invested funds were returned to investors in accordance with the agreements after Telegram was forced to terminate its participation in the TON project,” a Telegram spokesperson confirmed to IStories.

Telegram declined to comment on the names of specific investors, including those involved in schemes to export resources from the occupied territories of Ukraine.