November 22, 2019

Sanctioned ‘Donetsk’ Politician, Notorious Ponzi Schemer Pushes ‘Blockchain State’

By Brian Moser, Samuel Rubenfeld and Megi Hakobjanyan

PRIZM founder Aleksey Muratov sits for an interview in 2017. (Photo:


Aleksey Muratov, a representative of the breakaway “Donetsk People’s Republic (DPR)” in eastern Ukraine who pushed a notorious Russian Ponzi scheme in the past, is now promoting a cryptocurrency he founded and urging DPR to become a hub for borderless finance. 

Muratov, who has traveled in recent years to Russia, Turkey, India and elsewhere to promote PRIZM, a cryptocurrency he launched in February 2017, spoke in October at an investment forum in the Donbass following an announcement about an Islamic bank opening an office in the region. The new bank office, he said, would create an opportunity for “a kind of offshore zone” for foreign investors, including the potential to attract investment in blockchain technologies.

“The development of digital technologies will allow the DPR to move from the status of an unrecognized country to a decentralized blockchain state, which will give a chance for successful intensive socio-economic development without changing the legal status,” Muratov said. “This is very important because the process of official recognition of [the Donetsk People’s] Republic by the world community may take some more time.”

Muratov (left) presents an award in early October honoring teachers in the so-called “Donetsk People’s Republic.” Muratov says in recent media reports that the integration of the Donbass region with Russia can’t be stopped by war or economic blockade. (Photo: Public Movement Donetsk Republic website; CWT Ideology)

Muratov, who was sanctioned in 2017 by the U.S. Treasury Department as a representative of the DPR, fashions himself as a “legitimate” politician in the area, a self-declared state in Ukraine receiving support from Russia. A former local politician in Russia’s Kursk Oblast on the Ukrainian border, Muratov left the area in 2012 to join MMM, the organization behind a massive Ponzi scheme based in Russia in the 1990s that led to estimated losses of anywhere between $100 million and more than $1 billion. MMM relaunched online in 2011, branded as MMM-2011 with an internet-based global platform. Whereas the Russian iteration of MMM attracted 10 to 15 million participants, by 2015 the revived MMM (now called MMM Global) topped 130 million participants, according to News BTC. 

Muratov was arrested in 2013 in India along with two other Russians for marketing MMM, though he eventually made bail and fled the country. While a part of MMM, Muratov met Denis Pushilin, a former candy salesman, who promoted MMM in Southeast Asia and Crimea.

Pushilin was sanctioned by the U.S. in 2014 and became the head of the DPR in 2018 after the previous leader was killed. 

Pushilin, Muratov and a third man from their MMM days, Andrey Kramar, set up an aid campaign in 2014 purportedly to support the DPR separatist movement, but “only a small portion of the funds reached the intended recipients,” according to the U.S. Treasury.

Pushilin appointed Muratov in 2014 as an official representative to Russia of the DPR. More recently, Muratov became the “Head of the Central Executive Committee” of Public Movement Donetsk Republic, a European Union- sanctioned social organization that describes itself as “a powerful driving force in the public life of” the DPR. 

Amid his political work, Muratov found the time for a passion project: the creation of his own cryptocurrency.


PRIZM was first launched in 2017 by the Russia-based nonprofit International Public Movement CWT (Change the World Together). Muratov is a founder and chair of the organization’s management board, and CWT’s website refers to Muratov as the founder of the cryptocurrency.

Wallet apps for PRIZM are available on Apple’s App Store and Google’s Play Store; the PRIZM website mentions three exchanges that allow the buying or selling of the currency; two of them are based in the U.K. DonAvia, a DPR-based travel company that advertises trips to countries including Russia, India, and Turkey, accepts PRIZM as a form of payment. FLOGmall, an Estonia-based online platform where users can buy or sell goods and services using cryptocurrencies, also accepts PRIZM as a form of payment.

The cryptocurrency, which operates on an open-source code, traded at $0.54 as of Thursday afternoon New York time, according to cryptocurrency monitoring website CoinMarketCap. Transaction volume per day is steadily increasing; the currency traded about $14.5 million in total transactions between January and September of this year, CoinMarketCap reported.

In a strange twist, several online cryptocurrency news outlets reported this summer that the government of Bhutan had adopted a digital currency called Prizm as its “national cryptocurrency” that would be pegged “on equal terms with” the country’s fiat currency, the ngultrum. Each resident would receive 100 Prizm bought for USD 50 million by the Bhutanese government, according to one report. Residents would then be able to spend it or begin mining Prizm themselves. The market capitalization of Muratov’s PRIZM jumped to more than $110 million, up from $20 million, in the days leading up to the announcement, according to CoinMarketCap.

A press release, signed by an entity called the “Kingdom of Bhutan Information Center,” said the Bhutanese Prizm “was being tested for several years in different countries,” and that after testing “paramining was produced.”

The PRIZM logo, as featured in an article on

However, Doma Tshering, the Bhutanese ambassador to the United Nations, said in an email to Kharon that “the ‘Kingdom of Bhutan Information Center’ has no affiliation with the Royal Government of Bhutan or any of our national agencies.” The press release “has not [been] issued by any entities of the Royal Government,” Tshering said.

The focus on Muratov and PRIZM comes as cryptocurrencies continue to garner attention from U.S. and global regulatory authorities. Three U.S. regulators released a joint statement last month reminding those engaged in activity involving digital assets of their anti-money laundering and counter-terrorism financing (AML/CFT) compliance obligations. The Financial Action Task Force (FATF), the global standard setting body for AML/CFT policies, in June issued new guidance on cryptocurrency-provider compliance.


Outside of its commercial presence, PRIZM cultivates a brand revolving around Muratov’s personal political ideals. CWT has an online “ideology” book written by Muratov that explains why he “considered it his duty” to come to DPR, saying the “Ukrainian legitimate government was overthrown in Ukraine with the help of the world’s financial elite and pro-western puppets.” Muratov emphasized his experience as an official representative in DPR gave him a “strong background” to “create a new international movement.”

It promotes PRIZM as “the development of the CWT social movement” and says PRIZM’s mission “is to carry out a smooth transition from the world financial system based on the U.S. dollar to crypto economics, i.e., the future economy based on blockchain."

Muratov’s ideology book paints many facets of life as being run by a faceless group of global elites. (Photo: CWT Ideology)

PRIZM and CWT have historically self- and cross-promoted on social media, where they have a following; the PRIZM Facebook page has more than 30,000 likes. CWT organizes events promoting cryptocurrencies and criticizing the global financial system; Muratov has appeared at some of them, and has spoken at cryptocurrency conferences. A related organization, the PRIZM Broadcasting Company, hosts webinars and circulates PRIZM- and cryptocurrency-related news. And PRIZM held a ceremony in July 2019 in which a priest blessed the currency and its wallets.

Dmitriy Vasilyev, a Russian citizen who formerly owned Singapore-based cryptocurrency trader Wex, has promoted PRIZM in recent months in media interviews. Wex, seen as a successor to BTC-e, is the subject of a criminal investigation in Russia related to the alleged theft of EUR 450 million in cryptocurrency, according to a BBC News Russian report. 

BTC-e, previously the largest Russian-language cryptocurrency trading platform, shut down in 2017 when its owner was arrested in Greece and the website was seized by U.S. authorities on allegations of laundering billions in stolen bitcoin. Alexei Bilyuchenko, who has confessed to being both the tech administrator of BTC-e and Wex’s co-founder, was questioned by Russian authorities, testifying that he was forced to send all of the cryptocurrency in Wex’s wallets to unnamed staffers of the Russian Federal Security Service (FSB) shortly before the exchange ceased operations, according to the BBC Russian report. 

Vasilyev sold his interests in Wex in late 2018 to Darya Khavchenko following a deal with her father, Dmitry Khavchenko. Vasilyev was arrested in Italy in July 2019, though he was released later that month. Khavchenko is a former separatist fighter in the DPR.