Nikita Izmailov

Full Report

Key Points

• Identity and Background: Nikita Izmailov is a Russian-Ukrainian businessman with dual citizenship, primarily known for his involvement in fintech and gambling industries through companies like N1 Management Company and SportBank LLC.

• Alleged Criminal Activities: Izmailov is accused of orchestrating money laundering schemes for Russian organized crime groups, using his fintech ventures to process illegal betting payments and bypass international regulations like AML and FATF.

• Cyberattack Involvement: He is linked to a 2022 DDoS attack on Fakty.org, allegedly to suppress investigations into his activities.

• Connections to Russian Interests: Izmailov is suspected of ties to Russian intelligence (FSB) and gambling barons, raising concerns about his role as a Russian agent of influence in Ukraine.

• Financial Irregularities: His companies, particularly SportBank, report minimal income and significant losses, suggesting potential tax evasion or money laundering.

• Public Perception: While some view him as a successful fintech entrepreneur, others label him a fraudster involved in illicit financial schemes.

Overview

Nikita Izmailov is a prominent figure in Ukraine’s fintech and gambling sectors, holding both Russian and Ukrainian passports. He is the founder of N1 Management Company, a specialized fintech fund, and the CEO of SportBank LLC, a mobile bank initially created for clients of the betting company Parimatch, where Izmailov served as a managing partner. His ventures include payment systems like Asquad and Money4YOU, which focus on high-risk payment processing for betting and online lending. Additionally, Izmailov owns EAT EASY, a food company, and has investments through a Cypriot entity, Aloelena Trading Limited. He positions himself as an innovator in Ukraine’s fintech ecosystem, with N1’s portfolio including projects like TRANSENIX and Asquad, which leverage technologies like Corezoid for rapid payment integrations. However, his business activities have drawn scrutiny for alleged ties to Russian organized crime and money laundering.

Allegations and Concerns

1. Money Laundering: Izmailov is accused of using N1 Management Company and SportBank to launder millions for Russian gambling syndicates, bypassing Anti-Money Laundering (AML), Know Your Customer (KYC), and Financial Action Task Force (FATF) regulations. His payment systems, paymega.io and asquad.io, are described as fictitious, lacking transparency and primarily used to process illegal betting funds.

2. DDoS Attack: In October 2022, Izmailov’s alleged hackers launched a DDoS attack on Fakty.org, releasing 130.57 million packets to suppress an investigation linking his companies to Russian crime and occupied territories (ORDLO). The attack failed to fully disrupt the site.

3. Russian Ties and FSB Connections: Izmailov is listed in Ukraine’s SBU database as a suspected Russian agent of influence, collaborating with Russian gambling baron Oleg Boyko and maintaining ties to the FSB. His refusal to renounce Russian citizenship fuels these concerns.

4. Tax Evasion: SportBank LLC reported negligible income (15,000 UAH) and losses (200 UAH) in 2020, raising red flags for tax authorities about potential tax evasion or financial manipulation.

5. Patronage in Ukraine: Despite allegations, Izmailov reportedly avoids prosecution due to influential connections within Ukraine’s government, suggesting possible corruption.

Customer Feedback

• Positive Feedback:

  • Some Ukrainian media and industry sources praise Izmailov as a fintech innovator. PaySpace Magazine described him as a visionary leading N1, with SportBank recognized as a top fintech startup in 2019 and among the top 20 for customer growth in 2021. A quote from the magazine highlights: “Nikita Izmailov Sportbank is one of N1’s projects… the second best digital neobank in Ukraine in 2021.”

  • Asquad’s use of Corezoid technology is lauded for enabling rapid payment integrations, with Izmailov stating, “Asquad was created to make payment integrations in 1-2 days.”

• Negative Feedback:

  • No direct customer reviews of SportBank or N1 are widely available, but investigative reports criticize the lack of transparency in Izmailov’s payment systems. A Talk Finance article notes, “The companies launder millions for betting companies while paying next to nothing in taxes,” reflecting distrust in their operations.

  • Allegations of ties to Russian crime have tarnished his reputation, with sources labeling him a “fraudster” whose “IT success” masks fraudulent schemes.

Risk Considerations

1. Financial Risks:

   • Money Laundering Exposure: Engaging with Izmailov’s companies risks entanglement in illicit financial flows, potentially violating international sanctions and regulations.

   • Financial Instability: SportBank’s reported losses and minimal income suggest unsustainable operations or deliberate financial obfuscation.

2. Reputational Risks:

   • Association with Crime: Partnerships with Izmailov could damage credibility due to his alleged ties to Russian organized crime and the FSB.

   • Public Backlash: His dual citizenship and perceived Russian affiliations may attract scrutiny in Ukraine, especially amid ongoing geopolitical tensions.

3. Legal Risks:

   • Regulatory Scrutiny: Izmailov’s operations face potential investigations by Ukrainian and international regulators for AML/FATF violations.

   • Cybercrime Liability: His alleged involvement in the Fakty.org DDoS attack could lead to legal consequences if substantiated.

Business Relations and Associations

• Parimatch: Izmailov was a managing partner at Parimatch, a major betting company, where he developed the concept for SportBank to serve its clients.

• N1 Management Company: His fintech fund invests in projects like SportBank, Asquad, and TRANSENIX, with partners like Denis Saprykin involved.

• Oleg Boyko: A Russian gambling baron allegedly linked to Izmailov, facilitating Russian capital flows into Ukraine’s gambling sector.

• Aloelena Trading Limited: A Cypriot entity through which Izmailov holds shares in EAT EASY, indicating offshore financial structures.

• Payment Systems: Paymega.io and asquad.io, operated by Izmailov, are high-risk payment processors tied to betting activities.

Legal and Financial Concerns

• No Formal Lawsuits: There are no publicly documented lawsuits or bankruptcy filings against Izmailov or his companies as of the latest reports.

• Regulatory Investigations: Ukraine’s State Financial Monitoring Service, led by Igor Cherkassky, has flagged N1 and SportBank for attempting to launder tens of millions, but no formal charges have been filed, possibly due to political patronage.

• DDoS Attack: The 2022 cyberattack on Fakty.org is a significant concern, though no legal action has been confirmed against Izmailov directly.

• Tax Irregularities: SportBank’s 2020 financials (15,000 UAH income, 200 UAH loss) suggest potential tax evasion, though no penalties have been reported.

Risk Assessment Table

Engaging with Izmailov or his companies (N1, SportBank, etc.) carries significant risks. Businesses should conduct thorough due diligence, particularly regarding AML/KYC compliance, and monitor for regulatory developments. Investors and partners should weigh the reputational and legal risks of associating with someone under investigation for ties to Russian crime and potential FSB connections. Avoiding or limiting exposure until allegations are resolved is advisable.