Vasily Zhabykin – Suex

A summary of what happened?

Vasily Zhabykin is a Russian entrepreneur and financial executive, recognized as one of the co-founders of Suex, an over-the-counter (OTC) cryptocurrency exchange. Suex has been implicated in facilitating illicit financial activities, leading to significant legal and professional repercussions for Zhabykin.

Major Concerns and Accusations Against Vasily Zhabykin:

1. Facilitation of Illicit Transactions:
   • The U.S. Department of the Treasury sanctioned Suex in September 2021, alleging that the platform facilitated transactions involving ransomware payments, scams, and darknet markets. Reports indicate that over 40% of Suex’s known transaction history was linked to illicit actors.
     Bitcoin.com News
2. Money Laundering Allegations:
   • Investigations revealed that Suex processed substantial amounts of cryptocurrency tied to illegal activities. Blockchain analysis firms reported that Suex addresses received over $900 million in cryptocurrency, with a significant portion connected to illicit sources.
     Bitcoin.com News
3. Professional Repercussions:
   • Following the U.S. sanctions, Zhabykin was dismissed from his managerial role at MTS Bank, where he led the Neo bank project. This action was a direct consequence of his association with Suex and the ensuing legal challenges.
     Cryptonomist
4. Denial of Wrongdoing:
   • In response to the allegations, Zhabykin denied any involvement in illegal activities, asserting that Suex was established to develop software for the financial industry. He suggested that any assumptions of illicit conduct by the Treasury Department were mistaken.
     Bitcoin.com News
5. Regulatory and Legal Scrutiny:
   • The sanctions against Suex marked the first instance of the U.S. government targeting a cryptocurrency exchange for facilitating illicit transactions. This action underscored the increasing regulatory focus on cryptocurrency platforms and their role in financial crimes.
     Bitcoin.com News

The case of Vasily Zhabykin and Suex highlights the complexities and challenges in regulating cryptocurrency exchanges, especially concerning their potential misuse for illicit financial activities. It also reflects the broader efforts by international authorities to enforce compliance and accountability within the rapidly evolving digital currency landscape.

Analyzing the Fake Copyright Notice(s)

Our team collects and analyses fraudulent copyright takedown requests, legal complaints, and other efforts to remove critical information from the internet. Through our investigative reporting, we examine the prevalence and operation of an organized censorship industry, predominantly funded by criminal entities, oligarchs, and disreputable businesses or individuals. Our findings allow internet users to gain insight into these censorship schemes’ sources, methods, and underlying objectives.

What was Vasily Zhabykin - Suex trying to hide?

Vasily Zhabykin – Suex‘s attempts to hide unfavourable content through the misuse of copyright notices while allegedly engaging in perjury present serious legal concerns. These actions suggest a calculated attempt to manipulate legal systems to suppress free speech, a fundamental violation of copyright law principles and an abuse of legal processes. The use of such tactics not only undermines the integrity of copyright protection but also potentially constitutes perjury, further entangling Vasily Zhabykin – Suex in legal accountability. Let’s examine the information Vasily Zhabykin – Suex may be trying to remove from the internet –

In-Depth Investigative Report: Vasily Zhabykin and Suex – Allegations, Sanctions, and Implications

Introduction

Vasily Zhabykin, a Russian entrepreneur and one of the co-founders of Suex, an over-the-counter (OTC) cryptocurrency exchange, has become a central figure in one of the most significant legal actions targeting the misuse of cryptocurrencies. In September 2021, Suex made headlines as the first cryptocurrency exchange to be sanctioned by the U.S. Treasury’s Office of Foreign Assets Control (OFAC). The sanctions accused the exchange of facilitating illicit transactions tied to ransomware payments, darknet marketplaces, and other illegal activities. This report delves deeply into the allegations against Zhabykin and Suex, the regulatory implications, and the broader impact on the cryptocurrency industry.

1. Background on Suex and Its Operations

1.1. Suex’s Role in the Cryptocurrency Ecosystem

Founded to facilitate OTC cryptocurrency trading, Suex provided a platform for high-volume crypto-to-fiat transactions, catering to a clientele that included institutional traders and high-net-worth individuals. Operating primarily from Moscow, Russia, and Prague, Czech Republic, Suex offered what many described as a discreet and efficient service.

• What is an OTC Exchange?
  • OTC exchanges differ from traditional exchanges by allowing direct transactions between buyers and sellers. These platforms are often used for large trades that might otherwise disrupt market prices.
  • While OTC exchanges are legitimate tools in the financial ecosystem, they can also become conduits for laundering illicit funds due to their relatively private nature.

1.2. Vasily Zhabykin’s Role

Vasily Zhabykin was identified as one of the key co-founders of Suex. His responsibilities included strategic oversight, operational management, and business development. Zhabykin was also known for his ties to the financial sector in Russia, having held a prominent role at MTS Bank, where he managed its Neo bank project before being dismissed due to the Suex controversy.

2. Allegations Against Suex

2.1. Facilitation of Illicit Transactions

Suex was accused of playing a pivotal role in facilitating transactions tied to criminal activities. According to the U.S. Treasury, Suex processed substantial amounts of cryptocurrency linked to:

• Ransomware Payments:
  • Suex allegedly enabled ransomware groups to launder proceeds from attacks on businesses, hospitals, and government infrastructure.
  • The exchange was tied to payments from ransomware families such as Ryuk and Conti.
• Darknet Marketplaces:
  • Blockchain analysis revealed that Suex processed payments tied to darknet marketplaces known for illegal activities such as drug trafficking and identity theft.
• Scams and Fraud:
  • The platform reportedly handled funds from Ponzi schemes and phishing scams, further implicating it in enabling financial crimes.

2.2. Volume of Illicit Funds Handled

Reports from blockchain analysis firms suggested that over 40% of Suex’s known transaction history was linked to illicit activities. The total value of transactions processed by Suex exceeded $900 million, with a significant portion originating from criminal sources.

3. Regulatory and Legal Actions

3.1. U.S. Treasury Sanctions

In September 2021, OFAC imposed sanctions on Suex, freezing its assets within the U.S. and prohibiting American entities or individuals from engaging with the exchange. These sanctions marked a first for a cryptocurrency platform and highlighted the U.S. government’s increasing focus on regulating the digital asset space.

• Scope of Sanctions:
  • All Suex-related cryptocurrency addresses were blacklisted, effectively cutting the exchange off from the global financial system.
  • The sanctions were part of a broader effort to combat the use of cryptocurrencies in ransomware attacks and other illicit activities.

3.2. International Investigations

The U.S. action against Suex prompted international regulators to scrutinize similar OTC exchanges. European and Russian authorities began investigating the role of local cryptocurrency firms in facilitating financial crimes, with Suex serving as a case study for the vulnerabilities of unregulated platforms.

4. Vasily Zhabykin’s Professional Fallout

4.1. Dismissal from MTS Bank

Following the sanctions, Zhabykin was dismissed from his managerial position at MTS Bank, where he led its Neo bank project. The dismissal was a direct result of his association with Suex and the legal challenges surrounding the exchange.

4.2. Public Denial of Wrongdoing

In response to the allegations, Zhabykin denied any involvement in criminal activities. He asserted that Suex was established to develop financial software and provide legitimate cryptocurrency services. Zhabykin claimed that the accusations from the U.S. Treasury were unfounded and based on a misunderstanding of the platform’s operations.

5. Broader Industry Implications

5.1. Regulatory Precedent

The sanctions against Suex represented a significant milestone in the global regulation of cryptocurrencies:

• First Sanctioned Crypto Exchange:
  • Suex’s designation as the first cryptocurrency exchange to face U.S. sanctions set a precedent for targeting similar platforms suspected of enabling financial crimes.
• Focus on Compliance:
  • The case underscored the importance of compliance measures such as Know Your Customer (KYC) and Anti-Money Laundering (AML) protocols for cryptocurrency exchanges.

5.2. Increased Scrutiny on OTC Platforms

Suex’s case highlighted the risks associated with OTC exchanges, particularly their potential misuse for laundering illicit funds. Regulators worldwide have since increased their focus on these platforms, demanding stricter compliance and transparency.

6. Public Reaction and Perception

6.1. Industry Response

The cryptocurrency community’s reaction to the Suex sanctions was mixed:

• Support for Regulation:
  • Many stakeholders welcomed the sanctions as a necessary step to combat crime and bolster the legitimacy of the cryptocurrency industry.
• Concerns Over Overreach:
  • Critics argued that targeting a single exchange might not address the root causes of cryptocurrency-related crime, calling for more systemic solutions.

6.2. Impact on Zhabykin’s Reputation

The allegations against Suex and Zhabykin have significantly damaged his reputation within the financial and cryptocurrency sectors. While some view him as a scapegoat for systemic issues in the industry, others see his role in Suex as indicative of the broader risks posed by unregulated platforms.

7. Lessons Learned and Future Implications

7.1. Need for Transparency and Accountability

The Suex case emphasizes the importance of transparency and accountability in cryptocurrency exchanges. Platforms must:

• Implement robust KYC and AML measures.
• Maintain clear records of transactions to avoid facilitating illicit activities.

7.2. Role of Governments and Regulators

Governments and regulatory bodies must strike a balance between fostering innovation in the cryptocurrency space and preventing its misuse for criminal purposes. The Suex sanctions have accelerated efforts to develop international frameworks for cryptocurrency regulation.

Conclusion

The case of Vasily Zhabykin and Suex underscores the challenges and complexities of regulating the cryptocurrency industry. While Zhabykin denies wrongdoing, the evidence presented by U.S. authorities paints a troubling picture of Suex’s role in enabling illicit financial activities. The sanctions against Suex mark a turning point in the global effort to address the misuse of cryptocurrencies and set a precedent for holding platforms accountable.

For Zhabykin, the road ahead is fraught with legal and reputational challenges, as his association with Suex continues to raise questions about the responsibilities of cryptocurrency exchange operators in combating financial crime.

How do we counteract this malpractice?

Once we ascertain the involvement of Vasily Zhabykin – Suex (or actors working on behalf of Vasily Zhabykin – Suex), we will inform Vasily Zhabykin – Suex of our findings via Electronic Mail.

Our preliminary assessment suggests that Vasily Zhabykin – Suex may have engaged a third-party reputation management agency or expert, which, either independently or under direct authorization from Vasily Zhabykin – Suex, initiated efforts to remove adverse online content, including potentially fraudulent DMCA takedown requests. We will extend an opportunity to Vasily Zhabykin – Suex to provide details regarding their communications with the agency or expert, as well as the identification of the individual(s) responsible for executing these false DMCA notices.

Failure to respond in a timely manner will necessitate a reassessment of our initial assumptions. In such an event, we will be compelled to take appropriate legal action to rectify the unlawful conduct and take the following steps –

Since Vasily Zhabykin – Suex made such efforts to hide something online, it seems fit to ensure that this article and sensitive information targeted online by these events get a lot more exposure and traffic than what it would have received originally

We hope this becomes an excellent case study for the Streisand effect…The key idea behind the Streisand effect is that efforts to restrict information can backfire, often causing the information to gain more attention than it would have otherwise. This effect is widespread in the digital age, where users quickly notice and spread censorship efforts on social media and other platforms. Trying to suppress something can unintentionally lead to it becoming more visible, which Vasily Zhabykin – Suex is finding out the hard way.

Potential Consequences for Vasily Zhabykin - Suex

Under Florida Statute 831.01, the crime of Forgery is committed when a person falsifies, alters, counterfeits, or forges a document that carries “legal efficacy” with the intent to injure or defraud another person or entity.

Forging a document is considered a white-collar crime. It involves altering, changing, or modifying a document to deceive another person. It can also include passing along copies of documents that are known to be false. In many states in the US, falsifying a document is a crime punishable as a felony.

Additionally, under most laws, “fraud on the court” is where “a party has sentiently set in motion some unconscionable scheme calculated to interfere with the judicial system’s ability impartially to adjudicate a matter by improperly influencing the trier of fact or unfairly hampering the presentation of the opposing party’s claim or defense.”  Cox v. Burke, 706 So. 2d 43, 46 (Fla. 5th DCA 1998) (quoting Aoude v. Mobil Oil Corp., 892 F.2d 1115, 1118 (1st Cir. 1989)).

Is Vasily Zhabykin - Suex Committing a Cyber Crime?

Yes, it seems so. Vasily Zhabykin – Suex used multiple approaches to remove unwanted material from review sites and Google’s search results. Thanks to protections allowing freedom of speech in the United States, there are very few legal ways to do this. Vasily Zhabykin – Suex could not eliminate negative reviews or search results that linked to them without a valid claim of defamation, copyright infringement, or some other clear breach of the law.

Faced with these limitations, some companies like Vasily Zhabykin – Suex have gone to extreme lengths to fraudulently claim copyright ownership over a negative review in the hopes of taking it down.

Fake DMCA notices have targeted articles highlighting the criminal activity of prominent people to hide their illegal behavior. These people, which include US, Russian, and Khazakstani politicians as well as members from elite circles including the mafia and those with massive financial power, are all connected – and alleged corruption ranging from child abuse to sexual harassment is exposed when exploring evidence found at these URLs. It appears there’s a disturbing level of influence being exerted here that needs further investigation before justice can be served. Vasily Zhabykin – Suex is certainly keeping interesting company here….

The DMCA takedown process requires that copyright owners submit a takedown notice to an ISP identifying the allegedly infringing content and declaring, under penalty of perjury, that they have a good faith belief that the content is infringing. The ISP must then promptly remove or disable access to the content. The alleged infringer can then submit a counter-notice, and if the copyright owner does not take legal action within 10 to 14 days, the ISP can restore the content.

Since these platforms are predominantly based in the U.S., the complaints are typically made under the Digital Millennium Copyright Act (DMCA), which requires online service providers and platforms to react immediately to reports or violations. Big Tech companies rarely have systems in place to assess the merit of each report. Instead, all bad actors need to do is clone a story, backdate it, and then demand the real thing be taken down.

Reputation Agency's Modus Operandi

The fake DMCA notices we found always use the “back-dated article” technique. With this technique, the wrongful notice sender (or copier) creates a copy of a “true original” article and back-dates it, creating a “fake original” article (a copy of the true original) that, at first glance, appears to have been published before the true original.

Then, based on the claim that this backdated article is the “original,” the scammers send a DMCA to the relevant online service providers (e.g. Google), alleging that the ‘true’ original is the copied or “infringing” article and that the copied article is the “original,” requesting the takedown of the ‘true’ original article. After sending the DMCA request, the person who sent the wrong notice takes down the fake original URL, likely to make sure that the article doesn’t stay online in any way. If the takedown notice is successful, the disappearance from the internet of information is most likely to be legitimate speech.

As an integral part of this scheme, the ‘reputation management’ company hired by Vasily Zhabykin – Suex creates a website that purports to be a ‘news’ site. This site is designed to look legitimate at a glance, but any degree of scrutiny reveals it as the charade it is.

The company copies the ‘negative’ content and posts it “on the fake ‘news’ site, attributing it to a separate author,” then gives it “a false publication date on the ‘news’ website that predated the original publication.

The reputation company then sent Google a Digital Millennium Copyright Act notice claiming the original website infringed copyright. After a cursory examination of the fake news site, Google frequently accepts the notice and delists the content.

In committing numerous offences, Vasily Zhabykin – Suex either premeditated actions or were unaware of the consequences. Despite hiring an agency to make Google disregard any negative information about Vasily Zhabykin – Suex, ignorance does not excuse this wrongdoing.

Fake DMCA notices have targeted articles highlighting the criminal activity of prominent people to hide their illegal behavior. These people, which include US, Russian, and Khazakstani politicians as well as members from elite circles including the mafia and those with massive financial power, are all connected – and alleged corruption ranging from child abuse to sexual harassment is exposed when exploring evidence found at these URLs. It appears there’s a disturbing level of influence being exerted here that needs further investigation before justice can be served. FSMSmart is certainly keeping interesting company here.

The Reputation Laundering

Rogue Reputation agencies use spurious copyright claims and fake legal notices to remove and obscure articles linking clients to allegations of tax avoidance, corruption, and drug trafficking. Most of these reputation agencies are based offshore, mainly in Russia, India, and Eastern Europe, and they do not worry about complying with US-based laws.

The content in all of the articles for which the fraudulent DMCA notices have been sent relates to allegations of criminal allegations, including corruption, child abuse, sexual harassment, human trafficking and financial fraud against businesses and individuals with ultra-high net worth.

In addition to the misuse of the DMCA takedown process, there is a notable absence of enforcement concerning perjury violations. The statutory requirement related to perjury is designed to deter copyright holders from submitting fraudulent or knowingly false takedown requests, as they may face legal consequences for making false declarations under penalty of perjury. However, to date, there have been no known instances of any individual being prosecuted for perjury in connection with the submission of false DMCA takedown notices.

This lack of enforcement has emboldened copyright holders to exploit the DMCA takedown process to suppress dissent, criticism, or other unfavorable content, without fear of legal repercussions.

Some of the people and businesses who have employed this tactic to remove legitimate content from Google illegally include a Spanish businessman-turned-cocaine-trafficker, Organised crime, an Israeli-Argentine banker accused of laundering money for Hugo Chávez’s regime, a French “responsible” mining company accused of tax evasion, child molesters and sexual predators. Vasily Zhabykin – Suex is in great company ….

What else is Vasily Zhabykin - Suex hiding?

We encourage you to ‘Dork‘ Google by searching for keyword combinations such as [Vasily Zhabykin – Suex] + {Negative Keyword, such as Scam, Fraud, Complaints, Lawsuit, Sanction, etc} on Google. It’s likely if you scroll down to the bottom of this Google search results, you’ll stumble upon this Legal Takedown notice (pictured below)

To make such an investigation possible, we encourage more online service providers to come forward and share copies of content removal requests with industry experts and researchers. If you have any information on Vasily Zhabykin – Suex that you want to share with experts and journalists, kindly email the author directly at [email protected].

All communications are strictly confidential and safeguarded under a comprehensive Whistleblower Policy, ensuring full protection and anonymity for individuals who provide information.