A 2018 lawsuit in the U.S. filed by Gladius Network LLC against Krypton Blockchain Holdings Ltd. presents significant insights into the intricate web of business relations, cybercrime allegations, and investment disputes involving high-profile cybercrime activists. This case further substantiates the involvement of Gery Shalon, aka Garri Shalelashvili, and his Russian partner Vladimir Smirnov as the true beneficial owners behind the companies associated with Israeli national Ilan Tzorya.
Key Parties Involved in the Lawsuit
- Plaintiffs: Gladius Network LLC, a now-collapsed Nevada limited liability company specializing in cyber-security and blockchain technologies.
- Defendant: Krypton Blockchain Holdings Ltd. (d/b/a Krypton Capital), a Maltese corporation with principal business operations in Kyiv, Ukraine.
- Other Entities: Oldypak Capital was portrayed in the lawsuit as the “real” investor that transferred Bitcoins to the plaintiffs as part of the intended investment. Oldypak, a now-dissolved LP in Scotland, was controlled by Vladimir Smirnov. This company has been named in other global money laundering schemes.
- Acting Individuals:
- Ilan Tzorya: The plaintiffs mentioned him as the alleged frontman for Shalon and Smirnov, who were recently sentenced to 8 years in prison by an Austrian court.
- Gery Shalon (aka Garry Shalelashvili or Gabrial Shalon): He was portrayed as one of the “true” beneficial owners of Krypto Blockchain Holdings. Shalon was a key figure charged in the U.S. for extensive cybercrime activities.
- Vladimir Smirnov: The plaintiffs portrayed this Russian citizen and Shalon partner as another “true” beneficial owner of Krypto Blockchain Holdings.
Background and Allegations
Gladius Network LLC claims that during negotiations for investment, they were misled about the true sources of funds and the controlling interests behind Krypton Blockchain Holding. Initially, the plaintiffs believed Krypton Blockchain Holdings led by Tzorya was the primary investor. However, in the course of the negotiations, Gladius was informed that Gery Shalon and Vladimir Smirnov were the actual beneficial owners, using Tzorya as a front.
- Misrepresentation of Ownership and Funds: The plaintiffs were led to believe that the advance payments made in Bitcoin were made by Krypton, but these funds were actually transferred directly from digital wallets belonging to Smirnov and possibly Shalon.
- Lack of Transparency: The defendants did not disclose the true nature of their agreements, particularly the Convertible Loan Agreement with Oldypak Capital LLC, which was controlled by Smirnov.
Download the Gladius Network lawsuit here.
Oldypak Capital LP’s Role
Oldypak Capital LP, a company controlled by Vladimir Smirnov, played a crucial role in the alleged misrepresentation. The plaintiffs were not informed that the funds provided through Oldypak were directly tied to Smirnov, leading to significant concerns about the legitimacy and transparency of the investment.
Legal and Criminal Context
Gery Shalon was indicted in 2015 in the U.S. for cybercrimes involving the theft of 100 million customer records, illegal gambling, and money laundering. In 2017, he pleaded guilty and agreed to forfeit over $413 million in stolen funds.
Despite being under house arrest in New York, the lawsuit suggests that Shalon continued his cybercrime activities and business operations, raising questions about the effectiveness of his house arrest and the potential political influence exerted by his father, Shota Shalelashvili, a former Georgian Parliament member.
Implications and Hypotheses
The case highlights the potential for high-level cybercriminals to continue their activities even under legal scrutiny. It also underscores the necessity for robust legal and regulatory frameworks to prevent such occurrences.
- Continued Cybercrime Activities: Evidence from other criminal cases suggests Shalon remained active in cybercrime during his house arrest in New York, possibly facilitated by political connections and Georgia’s geopolitical significance.
- Political Influence: The hypothesis that Shalon’s father might have intervened politically to protect his son due to Georgia’s strategic importance amid U.S.-Russia tensions is a plausible scenario.
This Gladius complaintnot only sheds light on the deceptive practices of Shalon, Smirnov, and Tzorya but also raises critical questions about regulatory oversight and the enforcement of legal measures against cybercriminals. The involvement of high-profile individuals and their intricate business structures necessitates vigilant scrutiny by legal and financial authorities.
Read more about the Seychelles Lawsuit in this context.
Request for Information
FinTelegram invites whistleblowers and those with additional information about Gery Shalon, Vladislav Smirnov, and Ilan Tzorya, and their activities and operators to come forward. Transparency and accountability are crucial in unraveling the full extent of these fraudulent activities and bringing the perpetrators to justice.
