’Wall Street ’hustlers’ – what a surprise’, says the heroine of the movie ’Dump Money’, released in September 2023, which tells the true story of small investors’ struggle with the big players on the American stock market.
This film resonates with the situation that occurred on November 21 of this year with the Ukrainian exchange WhiteBIT. It turned out that in one day, the exchange operators managed to ’scam’ their investors out of very large sums, thus confirming their reputation for unreliability and scandalousness.
Photo from the Facebook page of Volodymyr Nosov
WhiteBIT positions itself as a Ukrainian exchange, created in 2018. Its director, at least the official media face, is Volodymyr Nosov. At the time of creation, his business partners were Mariia Repeshko, Anna Yankovska, and Mykyta Shentsev. The latter is a former member of the Kharkiv Regional Council from the banned ’Opposition Platform – For Life’, and his father, Dmytro, is a former Deputy of the Verkhovna Rada from the same pro-Russian OPFL.
Dmytro Shentsev resigned in September 2022, 7 months after the Russian Federation’s full-scale invasion of Ukraine. According to media reports, both Shentsevs are now in Russia. Shentsev Jr. was stripped of his Ukrainian citizenship at the beginning of this year.
Officially, Shentsev and Repeshko sold their WhiteBIT shares to Volodymyr Nosov in March 2023. But insiders constantly say that the Shentsev family remains a beneficiary of WhiteBIT’s income and helps channel Russian money through this exchange.
On November 21, a long-awaited event for cryptocurrency market participants was planned. The WhiteBIT exchange announced the start of sales of a new coin – WorldToken (WORLD), presented by the game studio World Challenge Game. As participants recount, the coin was considered quite reliable, so many decided to become so-called ’early birds’.
’’Early birds’ are the first investors who are given the opportunity to buy some coins even before the official trade begins. Usually, these people are veteran participants and are considered reliable, thus they receive such privileges from the exchange. Subsequently, when trading begins, ’early birds’ sell part of their assets, recouping investments, and earning on the difference. Then trading continues as usual’, explains a cryptocurrency market player.
However, what happened on November 21 was something investors didn’t anticipate. The WhiteBIT exchange ’scammed’ the ’early birds’ out of big money. It turned out that right after the first participants got access to the WorldToken, the exchange strangely forgot to close the possibility for participants to exchange coins until the official start of trading. As a result, when trading started, the market was already oversaturated, and the situation got out of control.
’Something very strange happened. Usually, the exchange never allows trades before the start of trading. If a similar situation occurs where trading is open before listing, it’s a gross error. In fact, the ’early birds’ who bought WorldToken in advance are now holding virtually worthless coins, even though they were bought for dollars. After the start, the token moved up very weakly and almost immediately fell’, says another market participant, who does not hide their disappointment with WhiteBIT’s behavior.
The Ukrainian exchange itself entered into a fierce skirmish with clients and organizers on platform X (formerly Twitter). Its representatives insist they are not to blame for the trades going differently than planned. Moreover, they do not acknowledge the reason for one of the biggest disappointments in the crypto market in recent times, that trading of coins wasn’t closed prior to the listing start.
In reality, WhiteBIT ’scammed’ its clients out of considerable sums of money. Now they do not know what to do with coins that not only did not bring the expected profit but also left them in the red.
However, the scandal of November 21 is not the only one in which WhiteBIT has managed to get involved recently. In mid-month, it became known that the National Bank of Georgia issued a license for the digital bank Hash. The opposition United National Movement stated that the new digital bank is aimed at ’legalizing Russian money and using it in next year’s elections’.
The fact is that among the founders of the Hash bank are some of Georgia’s wealthiest individuals, Sulkhan and Lasha Papashvili, along with their Ukrainian partner, Volodymyr Nosov. The latter is precisely the media face of the WhiteBIT exchange.
’Bloody and dirty Russian money will be used for election purposes and added to the treasury of Bidzina Ivanishvili’s party in the 2024 elections. We know that the previous leadership of the National Bank did not grant the sanctioned company of the Papashvili banking license, but Natia Turnava gave the go-ahead for Russian launderers’ bloody money into Georgia’, says Georgian opposition member Lasha Parulava and adds: ’After the patronage of Otar Partskhaladze, who was sanctioned by America as a Russian spy, Natia Turnava personally took the direct management of Russian money, raising justified suspicions that the ’Georgian Dream’ will try to use electronic channels to receive Russian money for elections’.
One of the founders of the digital bank Hash, Lasha Papashvili, has already spoken out in defence of Volodymyr Nosov, declaring that he is ’the most honest person who helps the Armed Forces and cooperates with the Ministry of Defence of Ukraine’. Allegedly, Nosov has no relation to Russian money.
Volodymyr Nosov often speaks about his support for the Ukrainian army. He even bought the iconic Eurovision microphone from the band Kalush for 900 thousand dollars to direct these funds to the Armed Forces of Ukraine. He also bought Freddie Mercury’s Rolls-Royce from Andrii Danylko for 11 million, stating that ’we cannot stay indifferent, because today every Ukrainian is on the top level’.
The Russian trace in the WhiteBIT exchange leading to the money laundering of the occupiers has not disappeared. In February 2023, the High Anti-Corruption Court obliged the National Anti-Corruption Bureau of Ukraine to investigate the possible illegal withdrawal of money from the country by the WhiteBIT exchange and its ties with Russia. Whether this investigation will lead to holding fraudsters accountable will be revealed over time.
But what is alarming is how Ukrainian authorities can sometimes treat partner choices frivolously. Last year, it was announced about the integration and cooperation of the WhiteBIT cryptocurrency exchange with the state portal ’Diia’, which stores documents and personal data of millions of Ukrainians. In March 2023, the Ministry of Digital Transformation, along with several companies, including WhiteBIT, launched an educational program on crypto literacy for Ukrainians. Participation in this can also be facilitated through ’Diia’. However, the integration of state structures with dubious cryptocurrency exchanges is hardly safe.
The finale of the movie ’Dump Money’, mentioned at the beginning of this material, was that small investors defeated Wall Street giants. The rules on the stock market were revised, and exchange operators began to listen to ordinary Americans. They achieved this through cohesion and irrefutable arguments at congressional hearings in the United States. Whether cryptocurrency market investors and ordinary Ukrainians who can be held hostage by the WhiteBIT exchange’s machinations will manage to protect themselves will be shown by the investigation of Ukraine’s anti-corruption bodies.
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