Ukraine: Racketeering Bitcoin

Zelensky controller/oligarch Kolomoisky’s Zaporozhye Ferroalloy plant https://gmk.center/en/manufacturer/zaporizhzhia-ferroalloy-plant/

….fronts a large bitcoin mining operation, and one of the most corrupt.

Making the news is a CFTC investigation into the Winkelvoss twins crypto exchange Genesis, but few know about Ukraine oligarch Ihor Kolomoisky’s Ferroalloy plant bitcoin operation – now shutdown – where the Kiev regime played a key role in electricity-supply collusion at prices representing a loss for the state.

Previously operating in Khazakstan, when the US coup failed there, Kolomoisky moved his bitcoin operation to Zaporozhye, Ukraine, aided by Georgian Manganese Corporation, another Kolomoisky shill operation. The Zaporozhye Ferroalloy plant, where the bitcoin mining was hosted, is controlled by the PrivatBank group headed by Igor Kolomoisky and Gennady Bogolyubov. Privatbank is quite notorious, and linked to American oligarchs and US criminality which operates in tandem with Ukraine governmental corruption, see: https://www.icij.org/investigations/fincen-files/with-deutsche-banks-help-an-oligarchs-buying-spree-trails-ruin-across-the-us-heartland/

The Zaporozhye Ferroalloy plant purchases state-generated electricity via Energoatom to power its bitcoin “mining” operation, the electricity purchased by one of Kolomoisky’s many shell corporations, called United Energy, where “bidding” on state-backed electricity is manipulated in collusion with the state-run Zaporozhye Nuclear Power Station, as operated by Energoatom. Energoatom Trading is a subset of the Ukraine energy cartel, and colludes with Kolomoisky’s United Energy shill operation. United Energy is led by PrivatBank’s Mikhail Kiperman, with Evgeny Geller – a Kolomoisky henchman – and Andrei Bogdan, to complete the wide-boy trading crew, and ‘bid’ for electricity, in what’s essentially a rigged format.

Investigative journalist Alexander Chernovalov reported in December 2020, that Energoatom sold 10 gigawatts of electricity to United Energy in one block. What’s interesting is that an audit by the state found that not only did Energoatom sell large blocks of electricity to Kolomoisky’s bitcoin operation at a loss, there were other bidders willing to pay more.

Perhaps surprisingly, according to to energy analyst Alexei Mikhailenko, United Energy’s rigged bidding operation for state-provided electricity for crypto mining broke no Ukraine laws, at least no laws presently in existence there. That’s because the Kiev Capitol of corruption has no laws concerning crypto regulation in any form, even if the electricity provided to power crypto mining has been unfairly obtained from the state. And by the way, crypto transactions/profits cannot be taxed in the Ukraine either.

Bottom line? Since bitcoin is a derivative of fiat currency, and depending on that relationship (ie either high or low) Kolomoisky could “make” a few million ($ US) “mining” bitcoin every month, to quite a few million, when bitcoin is running hot, taking advantage of electricity supplied by the state at less than cost. *

Then, in March this year, Russian-allied forces cut the electricity supply from the Zaporozhye power plant, causing Kolomoisky’s bitcoin “mining” operation in the Zaporozhye Ferroalloy plant to fail; by all accounts the “mining” has not re-started. Not reported anywhere — and certainly not in the Wall Street crypto-shill media — the shutdown of Kolomisky’s Zaporozhye bitcoin “mining” plant coincided with overall reduction in hashrate from the Ukraine due to the SMO, and a structured demolition in bitcoin overall which has been in progress since the Fed introduced quantitative tightening.

The SMO has drastically affected the Ukraine ability to play in that bitcoin space, and the western media is loathe to report on the structured demolition of bitcoin, especially if that demolition relates to US State’s criminal Ukraine/ Kazakhstan adventures.

Zaporozhye Ferroalloy plant

Ukraine investigative journalist Alexander Chernovalov: “According to the National Commission on securities and stock market, more than 90% of the plant’s shares are registered to five Cypriot firms owned by other offshore companies associated with various oligarchs. The company, first of all, belongs to the sphere of influence of the PrivatBank group headed by Igor Kolomoisky and Gennady Bogolyubov.”

Five Cypriot laundering operations

See: https://www.atlanticcouncil.org/wp-content/uploads/2019/06/kolomoisky_case.pdf

Ultimately this write-up is not a comprehensive description of corruption in the Ukraine, which the west feeds, as it grows like a hungry cancer. The above is simply a brief example of how Ukraine corruption in collusion with the State benefits the oligarchs there, many of whom have deep ties to the west.

*While Kolomoisky’s bitcoin operation is not the only one in the Ukraine, it is one of the most profitable, since United Energy purchased electricity from the state at less than cost, and this example serves as a bellwether for the corruption extant in the Ukraine.

Steve Brown

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