Ex-CEO of Sanctioned Cryptocurrency Exchange Sets Up New Ventures | Kharon The Kharon Brief

Ex-CEO of Sanctioned Cryptocurrency Exchange Sets Up New Ventures

Adapted from Adobe Stock

By Peter Maroulis

April 6, 2023

The former CEO of Garantex – a cryptocurrency exchange sanctioned by the U.S. government – has founded another crypto-to-fiat exchange, a Kharon investigation has found. The new exchange was established in Dubai, along with several other companies that appear to cater to Russians fleeing the country in the wake of its war on Ukraine. 

Garantex is a cryptocurrency exchange operating out of Russia. In April 2022, the U.S. Department of the Treasury designated Garantex, stating that:

Analysis of known Garantex transactions shows that over $100 million in transactions are associated with illicit actors and darknet markets, including nearly $6 million from Russian RaaS [ransomware-as-a-service] gang Conti and also including approximately $2.6 million from Hydra [sanctioned by U.S. Treasury as the “world’s largest and most prominent darknet market”]. In February 2022, Garantex lost its license to provide virtual currency services after supervision by Estonia’s Financial Intelligence Unit revealed critical AML/CFT deficiencies and found connections between Garantex and wallets used for criminal activity. 

According to the U.S. government, the majority of Garantex’s operations were “carried out in Moscow, including at Federation Tower, and St. Petersburg, Russia, where other sanctioned virtual currency exchanges have also operated.” Garantex continues to operate and work with third-party crypto-fiat exchanges around the world.

In April 2022, Garatnex’s CEO, Mohammad Khalifa, who is not subject to sanctions, stepped down and founded a new exchange named MKAN Coin. Former Garantex product manager Nikolai Shorin serves as MKAN Coin’s Chief Operating Officer, according to his LinkedIn profile. The exchange, which is headquartered in Dubai’s Multi Commodities Centre (DMCC), allows users to purchase and sell Bitcoin, Ethereum, and stablecoins using dollars, euros, and dirhams. 

According to the MKAN website, transactions are initiated via phone, website, or WhatsApp. After establishing contact via one of these platforms, customers negotiate a crypto-fiat exchange rate with a MKAN Coin manager before making the actual exchange at one of MKAN’s physical offices.

MKAN Coin operates several Russian-language channels on the social media application Telegram that cater to clients in the UAE, Thailand, Georgia, and Brazil. These countries have emerged in the past year as popular destinations for Russians fleeing their country following the expansion of military conscription and the imposition of western sanctions.

Screenshot of a MKAN Coin Telegram account. Translation: “In MKAN Coin you can: Receive AED/USD/Euro in Dubai (cash/cashless). Send cash/cashless funds to the Russian Federation. Buy and sell the cryptocurrency Bitcoin/Ethereum/USDT. Get a manager’s check for the purchase of real estate. Press Start for connection with a manager."
Screenshot from the MKAN Coin website.

MKAN Coin maintains an official partnership with Garantex. According to the Garantex website, this relationship allows users to “recharge [their Garantex] account or withdraw cash from it,” at physical partner office locations “with no restrictions to cards issued by any bank.” 

Partner page on the Garantex website

Alongside MKAN Coin, several other companies under the MKAN moniker appear to cater to Russians in Dubai, including car leasing, real estate and legal services. These companies were established between April and December of 2022, records show, and list the same address in Dubai.

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