Crypto Exchange WhiteBIT: Who Stands Behind the "Pocket Owner"?

Crypto Exchange WhiteBIT: who is behind the 'founder-owner'?

A successful Ukrainian startup is involved with adherents of the 'Russian world' and, possibly, hostile intelligence services.

Can companies with even the smallest suspicion of cooperation with an aggressor country operate in Ukraine? The question is rhetorical. Still, businesses with Russian roots are stubbornly seeking ways to stay on the Ukrainian market. Moreover, under a Ukrainian signboard, hostile intelligence services might try to operate. One example is the WhiteBIT crypto exchange, which allegedly belongs to a Ukrainian businessman and even collaborates with Ukrainian authorities.

But if you start untangling the knot of opaque ownership, you will find that the threads of the exchange lead not only to pro-Russian politicians but also to the GRU of the Russian Federation and war sponsors against Ukraine, writes Vitaliy Kulik, director of the Center for the Study of Civil Society Problems, in his column.

Recently, a article appeared on the site of the British publication Cryptointelligence, which outlines interesting facts about the WhiteBIT crypto exchange, whose owner is considered to be Kharkiv resident Volodymyr Nosov.

This is probably the most well-known among Ukrainian cryptocurrency exchanges, actively investing in its own PR, and at the highest level. For example, WhiteBIT had joint projects with the Ukrainian Foreign Ministry, including those aimed at supporting Ukrainian refugees. And the Ministry of Digital Transformation, as the British publication notes, using this exchange launched a free 'literacy boost' for the population in crypto literacy.

But cooperation with authorities is not the only PR channel for WhiteBIT. This exchange sponsors sports clubs and events. After the start of the full-scale invasion, it became a sponsor of the Turkish football club Trabzonspor. For the logo on the players’ jerseys, WhiteBIT paid 4,5 million euros. The same agreements were made with Barcelona, and recently with the Ukrainian national football team.

Generous infusions of money into advertising are evidently intended to position this crypto exchange as a progressive Ukrainian startup. But is it Ukrainian? And isn’t this activity a smoke screen for much different affairs?

A careful look at ownership structure reasonably suggests that behind the scenes of the cryptocurrency exchange there may be pro-Russian politicians and even Russian security services.

True owners

According to the British publication, the true 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 Shentsov, a former Kharkiv city and regional council deputy, a 'Region' and son of the well-known 'Region' deputy Dmitry Shentsov.

The Estonian commercial register confirms this fact – as of 2 March 2023, Mykyta Shentsov indeed was among the founders of WhiteBIT from its inception. It is reliably known that his stake in the Estonian company steadily grew, and as of 1 March this year he controlled 51% of the company. To view this information, you need to register on the Estonian registry site and click the 'History' button. But for convenience we will leave a screenshot:

It is also possible to confirm that previously R&D SPRINT EFFECTIVE OÜ was named Whitebit Financial Company OÜ.

At the beginning of March this year, both Mykyta Shentsov and Maria Repeško, who are connected to him through a joint company, suddenly transferred their shares to Volodymyr Nosov, and the company changed its name to R&D Sprint Effective (though the email remained the same, with the login whitebit).

One can suppose that the deputy decided to re-register his share after information that the largest European crypto exchange belongs to him began to leak into the public sphere.

Mykyta Shentsov has been a Kharkiv City Council and Kharkiv Oblast deputy since 2010 year, first for the Party of Regions, then for OPZZh. In 2019 year he submitted an application for conducting the 'Immortal Regiment' event. Mykyta is the son of Dmitry Shentsov, a former deputy from OPZZh. Both resigned their mandates during the full-scale invasion – the father in September 2022, the son in February 2023.

Mykyta and Dmitry Shentsovs

Dmitry Shentsov can be called a paradigmatic pro-Russian politician. In 2010 year he headed an 'anti-fascist forum' with propagandistic rhetoric that is hardly different from modern Russia's rhetoric. In 2013 year he received a medal from Putin for 'promoting the Russian language and culture' in Ukraine. In 16 January 2014 year he voted for dictatorial laws that aimed to destroy Maidan, broadcast the narrative about the 'Odessa tragedy' in 2 May 2014 year, and in 2018 year he voted against the law on Ukrainian sovereignty in the territories of ORDLO.

The Russian GRU and the coup in Montenegro

As noted in the Cryptointelligence publication, the WhiteBIT exchange's ownership structure includes the company Coddan Nominee. It is part of a sprawling offshore network and was among the founders of another company – Sofbiz.

According to the journalists' investigation, it is suspected of financing in 2016 the coup in Montenegro. Law enforcement in that country found that 1,5 million euros invested in Sofbiz’s coup were meant to go to the assassination of the then prime minister, and later – to the Montenegrin president Milo Đukanović. This politician sought Montenegro’s entry into NATO.

The Bellingcat investigation and its Russian partner The Insider demonstrated that GRU officers of the Russian General Staff – Eduard Shishmakov and Vladimir Moiseev – were involved in the Montenegro coup.

They worked with pro-Russian Montenegrin politicians and recruited Serbian citizens to cooperate.

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

Why is this important? Cryptocurrency mechanisms are now actively used by Russians because ordinary methods of conducting financial transactions are extremely restricted by international sanctions.

Estonian financial publication 'Business News' recently drew attention to one interesting nuance of WhiteBIT’s activity.

As stated in the Estonian media’s publication, this crypto exchange is credited with aiding in transferring funds from the Russian exchange BTC-e. The founder of the latter, Russian citizen Alexander Vinnik, was extradited to the United States in the summer 2022 year on suspicion of money laundering amounting to 4 billion dollars.

The exchange’s finances remained idle for a long time, but in March 2023 year unusual manipulations began. IT journalists noticed that money from the Russian exchange was split into small sums and withdrawn from various services. In particular, it was alleged that the Ukrainian startup took about 12 million US dollars.

The connection of WhiteBIT with a pro-Russian fifth column, odd transactions already drawing the attention of international press, and the opaque ownership structure with possible direct ties to the Russian GRU – seem to be more than enough arguments for at least thorough scrutiny by law enforcement in war-torn Ukraine.

Moreover, users of the crypto exchange who do not know, hoping for transaction anonymity, may unknowingly hand over their data directly to the Russian military intelligence.

As for the Russians, it is quite in the spirit of their so-called 'special operations' to cloak themselves with a brand of a supposedly Ukrainian startup, invest in its promotion, and behind this screen hide money and fund their dirty deeds against the entire civilized world and Ukraine itself.