CRYPTOCRIME CASE COINTED: INSOLVENCY, ASSET ALLOCATION AND AFTERLIFE

Cointed and Avatar crypto schemes

FinTelegram is currently part of several major cybercrime case investigations. Apart from the large cases concerning binary options, our team has been working on the ENVION and COINTED cases for months. In the COINTED case, we have often pointed out the contradictions and obviously false information given to customers and investors and warned against COINTED. The proximity of the acting persons as well as of the company itself to the Crypto-Scam OPTIOMENT with more than 10,000 victims and some USD 100 Mio damage should have let the alarm bells ring anyway. Now that the management has finally filed for insolvency, some questions remain unanswered:

  • what happened to the Crypto-ATM’s?
  • where is the mining equipment worth millions of Euros?
  • where is the investors’ and clients’ money?
  • what are the authorities doing?

According to the documents available to us, at least EUR 14 million investment have been collected by COINTED via various channels. The largest part was certainly invested in crypto mining, but also in the Initial Coin Offering (ICO), the crypto ATM business and the exchange office. Through one of the founding investors of the Crypto Mining division, we have gained a detailed insight into the processes and can draw our conclusions on the basis of these facts.

Insolvency petition filed

At the end of September 2018 it became known that COINTED had filed for bankruptcy in Innsbruck, which had not been completed by 30 September 2018 due to a lack of the required deposit for the insolvency expenses. Apparently, the company itself lacks these few thousand euros in order to be able to handle and process the insolvency of the company properly with the support of an insolvency administrator. Or there is simply a lack of will to carry out this orderly processing in the course of an insolvency. The latter is supported by a number of incidents that have recently become known.

Asset Transfer Part 1: Crypto-ATM’s

The fact is that COINTED carried out a number of questionable transactions in the weeks and months prior to the filing for insolvency. A total of 85 of its crypto-ATM’s were sold to the Austrian AVATAR Technology GmbH for the alleged purchase price of EUR 285,000. The money was paid into COINTED’s company account with Unicredit in the Czech Republic and should have been available to the company’s creditors.

According to the documents available to us, at least EUR 14 million in investor money flowed to COINTED via various channels”. The largest part was certainly invested in crypto mining, but the compnay also did a Token Sale (ICO), the crypto ATM business and the exchange office. Through one of the founding investors of the Crypto Mining division, we have gained a detailed insight into the processes and can draw our conclusions on the basis of these facts.

CEO Wolfgang THALER announced in his farewell video in June 2018 that he would sell the exchange business line and use the proceeds to satisfy creditors. Obviously this did not happen – or maybe it did? There are a lot of rumours about this!

Cointed sold ist crypto-ATM business to AVATAR Group
Cointed sold ist crypto-ATM business to AVATAR Group

Apparently, COINTED customers and investors received nothing from those EUR 285,000. From the many claims filed with FinTelegram and lawyers, we can conclude that customers or investors did not get their money back from COINTED. On the contrary, more and more frustrated customers and investors are reporting to us.

The AVATAR Group’s connection to 21Coinworld, another Austrian crypto-MLM specialising in crypto-mining, is also interesting in this context. The connection can be established via the MLM structural distributor Albert HINTERDORFER, who is both CEO of the Swiss AVATAR Bitbyte AG and of the crypto-MLM scheme 21Coinworld (here our report on 21Coinworld).

The connections in this Austrian crypto network are dense and largely intransparent for authorities and investors. It is a fact, however, that one repeatingly comes across only about a dozen people who stand behind these systems and juggle with investors’ money. The COINTED people were an integral part of this network until they disappeared.

Asset provision Part 2: Crypto-Mining Server

The transfer of assets did not stop at the crypto ATMs. From our files we can conclude that considerable parts of the crypto-mining servers were intentionally taken away from COINTED and relocated with other crypto-mining schemes. As a matter of fact, Charli AHO tried to park the crypto mining servers elsewhere in the weeks and months before the insolvency. In view of the complex structure of the company, only speculations can be made about the details at this point.

Through a tip from a former COINTED partner, we learned that Charli AHO and Christopher RIEDER have been operating the Hong Kong-based crypto-mining company QUANTUMBIT LTD since autumn 2017 (registered in September 2017). On the website of the Austrian sales structure organization Krypto GmbH you can read a cheerleading report about this mining scheme. It is full of praise for the efficient crypto entrepreneurs Charli AHO and Christopher RIEDER. Accordingly RIEDER and AHO stand with their QUANTUMBIT LTD behind the “legitimate” crypto mining project MINETED (Note: the appendix “TED” and the associated similarity of name with COINTED was probably intentional and also the slogan “The Future of Money” or “Green Mining” remained the same).

Christopher Rieder and Charli Aho run multiple crypto-schemes with different partners
Christopher Rieder and Charli Aho run multiple crypto-schemes with different partners

The well-meaning tone of the reviews is probably also due to the fact that the DOPPLER bros are involved in the MLM system. According to the domain information www.minted.com was registered in October 2017 by Karl DOPPLER or he is registered as administrator. The domain was then taken over by a Gold Digger Capital Ltd in Hong Kong.

MINTED is designed as a crypto-MLM. You first need a sponsor for a referral link before you get started. This time they obviously didn’t only want to earn money by mining (if that’s possible at all), but also by deploying a MLM system. Similarities with NEXUS GLOBAL are not excluded. The meetings with the NEXUS GLOBAL co-founder Christian Michel SCHEIBENER and the COINTED people in Vienna at the beginning of the year were obviously fruitful.

However, the MINETED system is unlikely to be particularly successful if you look at the 9 Likes on Facebook or the web ranking. The project started in December 2017 and is apparently marketed by the DOPPLER brothers of Krypto GmbH, who have already become conspicuous in connection with ArbiTraCoin and other scams. There is also a webinar recording from March 22, 2018 in which Karl DOPPLER describes the connections and ingenuity of this new MLM scheme in more detail.

Quantumbit Ltd
Quantumbit Ltd

We will shortly be publishing a comprehensive report on MINETED scheme and its background. Today we want to paint the big picture in connection with the bankruptcy of COINTED.

Misleading white paper and transparency report

The time axis in the overall context of the RIEDER and AHO projects is quite interesting. As already mentioned, the MINETED project was already started in autumn 2017 and thus almost at the same time when the ICO of COINTED was started. Neither the COINTED White Paper nor the transparency report prepared by the Austrian 21 Group contains a corresponding reference. This may also be related to the fact that the 21 Group had or has a close relationship to both COINTED and the AVATAR Group. In any case, it is up to the authorities in the interest of the investors and customers of both groups of companies to examine what role the 21 Group played in the capital procurement measures of the two groups of companies.

So, where is the money and where are the assets?

So let’s be clear: on the one hand COINTED has sold the crypto-ATM’s and collected EUR 285,000 and on the other hand Charli AHO and Christopher RIEDER apparently continue to operate crypto-mining with equipment which, according to the documents available to us, has at least been partly paid by COINTED creditors.

The assets pool of a company are is the collateral for its creditors in the event of insolvency. Removing assets from a company is not only a violation fo the management’s ficuciary obligations but also constitutes a criminal offence and impairs the interests of creditors. Due to the complex structure around the COINTED operators RIEDER, THALER, AHO and ORLOV, it must be assumed that a comprehensive investigation is required to determine where the money and assets of COINTED have actually been transferred to.

What will happen next?

Mineted-sponsored crypto event
Mineted-sponsored crypto event in Turkey

According to the latest reports, Christopher RIEDER and Wolfgang THALER are in currently residing Turkey, with which there is no extradition agreement. Christopher RIEDER has let two appointments burst at the public prosecutor’s office and is hiding in Turkey’s sun. Also the project MINETED has an accordingly strong Turkish relationship. The website is also available in Turkish and events in Turkey have been sponsored by Mineted.

From our point of view, the opening of insolvency would be in the very best economic interest of COINTED’s creditors and investors. In this respect, we have suggested such a procedure via a Viennese law firm and offered our support in the event that the court in Innsbruck is unable to open insolvency due to lack of assets. We collect the creditors’ claims and forward them accordingly. Damaged investors and creditors can contact us and receive the necessary data for the registration of their claim.

In any case, the Austrian public prosecutor’s office should accelerate the investigations in the interest of the investors and customers and the Austrian capital market after the house searches at COINTED already carried out and the facts now coming to light. In the context of OPTIOMENT with are talking about a USD 120+ Mio cryptocrime case here. This should very well justify an international approach of enforcement agencies and authorities, we guess.