A FORMER chief minister, a leader of the opposition and several all-powerful lawyers are among an eye-opening list of Gibraltar’s key power brokers who allegedly invested in a fraudulent crypto exchange.
The extraordinary roll call of Globix punters, seen by the Olive Press, also includes leaders in business and finance, as well as the boss of a leading legal firm.
They are just some of the hundreds of people in Gibraltar, Spain and the UK that handed over a collective €26 million to Globix boss Damian Carreras.
A total of 136 investors have so far made applications to the liquidators attempting to unravel the complex web behind the Gib-based firm.
A number of them handed over millions to the business, which was administered by Miracle World Ventures, registered in the British Virgin Islands.
Sole shareholder Carreras and his associate, tech officer Pavel Sidorov, are wanted over suspicions they syphoned millions from crypto wallets after the exchange had locked investors out of their funds in early 2022.
But the company was only put into voluntary liquidation one year later, on March 10 2023, seven days after the Olive Press first broke the story.
This week Gibraltar Supreme Court heard that at least €1.3 million was spent during this period on lavish spending sprees at upmarket shops in nearby Marbella.
Daniel Feetham KC, representing liquidators from the London firm Begbies Traynor, detailed Carreras’ love of bling, including €80,000 at Fendi, €52,000 at Prada and his clear favourite, Louis Vuitton, where he splashed over €500,000.
A further €110,000 was spent at Tagore, while he dished out €116,000 alone on luxury hotels.
The year-long gap between alarm bells ringing and formal action being taken raises questions as to why more was not done to pursue Carreras and the missing funds, given the influence of the establishment figures invested.
Most investors the Olive Press has spoken to cited a ‘FOMO’ (or a fear of missing out) effect after seeing early investors withdraw ‘unbelievable’ gains of up to 30% per month at the beginning.
An apparent Ponzi scheme, Carreras lured in later investors by showing them the ‘VIP list’ of some of the best known establishment figures in Gibraltar already invested.
The Olive Press understands the majority, at least a dozen of them lawyers, have chosen to stay in the background.
“They would prefer to sit on their hands and write off their money rather than publicly admit they were conned in this clear Ponzi scheme,” one senior legal source explained, this week.
“The reputational damage is anything but good,” he added.“After all, these are the very people who are often paid to advise on multi-million pound deals and help to create laws and bring in regulations in areas like crypto-currencies.”
The saga will certainly not help Gibraltar get off the Financial Action Task Force’s grey-list.
The Rock was placed on the list for countries with inadequate anti-money laundering and terrorist funding controls in June last year, and its continuing inclusion will be reviewed later this month.
More alarming, perhaps, are the implications that Globix became a repository for ‘a lot of drug lords and other kinds of black money.’
“There was some questionable transactions going through various accounts,” said one source with deep access to the case.
Carreras, who failed to show up for court on Tuesday either in person or via an agreed video link, claims to have been receiving death threats and is worried for the safety of his partner and child.
His fears are grounded in reports that last summer Sidorov and his wife were kidnapped from their home, near Alicante, at gunpoint, over the missing millions.
He wrote to liquidator Adrian Hyde in an email that it would be ‘foolish to compromise my location’ as he tried to dodge face-to-face meetings to answer questions.
However, Feetham labelled him ‘economical with the truth’ over claims he never received a ‘Teams invitation’ for a videolink testimony.
The KC added Carreras had failed to comply with earlier court orders to reveal information on the inner workings of the Globix platform.
This will inevitably lead to ‘contempt charges’ and an ‘arrest warrant’, he announced ominously.
No ledger or bookkeeping with details of investments by whom or what amounts has been handed over to the liquidation team.
“This should be the first thing produced by Carreras,” Feetham slammed.
Yet the liquidators appeared very forgiving of the Globix boss’ lack of cooperation.
Feetham was keen to propose to Mr Justice Liam Yeats further opportunities for Carreras to submit to cross-examination via video link, much to the frustration of the investors they represent who would prefer tougher action.
He then went on to explain that investors’ funds were apparently sent to a crypto wallet called the ‘Globix funding wallet’, which was, in fact, Carreras’ personal wallet.
And then it forwarded to the ‘Globix.cash’ wallet, which was controlled by Sidorov, but in the name of his wife, ‘Alla Babenko’.
A total of €28.5 million was sent to Babenko.
“They sent the funds because they trusted me,” Carreras wrote in a witness statement to the liquidators that was read out in court.
“But at the end of the day, I transferred the funds to a wallet controlled by Pavel Sidorov.”
Feetham noted there was ‘some evidence’ this money was invested, but not under the terms that Globix had sold its investors on.
He pointedly added there was no evidence of the ‘advanced trading bots’ or ‘algorithms’ behind Globix, that Carreras had boasted of to explain the supposedly massive returns.
Instead, once the money reached Babenko’s account, millions were simply transferred to other crypto exchanges, including two addresses at an exchange called Bitzlato.
Bitzlato is under investigations for money laundering activities by several countries, including the US Department of Justice.
A further €10 million was sent to Russian ‘ransomware-enabling’ exchange Garantex, which was sanctioned by the US in April 2022 for money laundering and criminal activity.
It is unknown where the rest of the funds went, although at least €1.3 million went on bling.
It is also unclear whether liquidators will be able to recover enough to reimburse investor capital.
A hearing – which Carreras will be required to attend under penalty of criminal charges – will be set for later this year.
One investor told the Olive Press: “A lot of families are suffering as a result of all this.”
He added: “I can’t tell you the sleepless nights I have had over this.”
READ MORE:
CASHING OUT: Globix boss led ‘lavish lifestyle’ splashing half a million at Louis Vuitton and €80,000 at Fendi Gibraltar politician and other big shots among the investors in failed crypto scam Globix EXCLUSIVE: Liquidators probing Globix close in on suspicious payments taken out of the company.
