5 Oct, 2023 @ 18:01
3 mins read

‘The algorithms did it’: Suspected mastermind behind Globix crypto fraud blames bots and Ukrainian programmers for missing millions

Gibraltar Supreme Court
Gibraltar-Supreme-Court

THE suspected mastermind behind the Globix crypto fraud told a Gibraltar court today that it was automatic trades and deceitful Ukrainian subcontractors that are responsible for the missing millions.

Russian Pavel Sidorov, the technical officer for the defunct crypto platform, finally submitted himself to the court for questioning after crying off on previous occasions claiming he did not speak English.

He connected to the court via video link and an interpreter in his efforts to assist liquidators in untangling the murky web of trades that saw the Gibraltar-based company tank losses of €40 million.

He shocked the court from the start by revealing that he was talking to them from the Moscow region – beyond the reach of Spanish law enforcement having fled his Alicante home.

Upon questioning, he told Daniel Feetham KC that he had only been paid around €800,000 in total for his work with the company.

It contradicts what Sidorov has previously told this newspaper – in English – that his total earnings from Globix ‘as a freelancer’ had been a mere €300,000.

Feetham expressed surprise that Sidorov had received such relatively low payment after he had claimed that he had given Globix CEO Damian Carreras the trading algorithmic ‘bots’ behind the platform for free.

“It is very hard to believe that you received relatively little money from Globix, bearing in mind that it’s your system that you controlled and what Mr Carreras was taking out,” Feetham said.

Sidorov explained that he and Carreras had originally agreed to split the profits 50-50, but in the end this had no happened.

“I did not take any money out of Globix,” Sidorov insisted. 

Carreras had ensnared investors in Globix with boasts of bots that made automatic trades utilising artificial intelligence which offered ‘unbelievable’ returns of up to 30% a month.

Sidorov claimed that he was not in control of trades made which saw €10 million sent to the sanctioned Russian crypto exchange Garantex as they were made ‘automatically’ by these algorithms.

“So your choice of using an exchange that was sanctioned after the Russian invasion of Ukraine in 2022 was nothing to do with the opaqueness of the platform which makes it impossible to trace the money?” Feetham asked.

“No,” the Russian replied. “Garantex offered us better trades and lower commissions.”

As to whether the missing millions are now, Sidorov blamed Ukrainian programmers he had hired to help him code the algorithm hijacking the system.

He claimed he had asked them to shut him out of his own platform during a kidnap attempt on himself and his wife, Alla Babenko in June 2022.

“When you were allegedly kidnapped, did the Ukrainian programmers have access to the crypto wallets?” Feetham asked.

“Absolutely,” Sidorov replied. “The Ukrainians had access to all the money in the Globix system.”

“What mechanism was in place to prevent the programmers from stealing the crypto currencies?”

“There was no particular guidance or framework, the system was still being developed. There’s no way to protect oneself from the insiders who made the system,” he added.

When quizzed on why no due diligence had been done on the Ukrainian company, he replied that it was ‘not his remit.’

The liquidators had previously discovered that all the Globix trades with investor money had been made by a crypto account on the Binance exchange in the name of Babenko, and not Sidorov.

Sidorov explained that he had in fact divorced Babenko in 2020, prior to incorporating Miracle World, the parent company Globix operated under.

But he absolved her of any responsibility for the trades made in her name, claiming that she was entirely unwitting of what Sidorov was doing with the crypto account.

“The account was connected to my email and my phone number,” he said. “She does not know the first thing about crypto currencies. She is totally clueless.”

When pressed on whether he had lied to Binance in order to open the account in someone else’s name, Sidorov said: “Let them bring a lawsuit against me if they have an issue with that.”

Despite fears that Sidorov might have escaped to Russia, sources close to the case told the Olive Press that a Moscow law firm is on standby to pursue him on his own turf.

“Russia is a tricky jurisdiction. But in the end we wouldn’t be doing all this if we didn’t think we could get the money back,” the person said.

“We wouldn’t throw good money after bad.”

Hundreds of creditors were left devastated after Globix shut them out of their investments in early 2022, including some of the most powerful people in Gibraltar.

A separate criminal investigation was opened by Gibraltar Royal Police in July.

The hearing resumes tomorrow.

READ MORE:

Walter Finch

Walter - or Walt to most people - is a former and sometimes still photographer and filmmaker who likes to dig under the surface.
A NCTJ-trained journalist, he came to the Costa del Sol - Gibraltar hotspot from the Daily Mail in 2022 to report on organised crime, corruption, financial fraud and a little bit of whatever is going on.
Got a story? walter@theolivepress.es
@waltfinc

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Malaga to Madrid from €7: Renfe launches sale on train fares starting TODAY
Previous Story

Malaga to Madrid from €7: Renfe launches sale on train fares starting TODAY

Real Madrid star Vinicius questioned by judge over racist abuse by Valencia football fans in Spain
Next Story

Real Madrid star Vinicius questioned by judge over racist ‘monkey chants’ by Valencia football fans in Spain

Latest from Alicante

Go toTop

More From The Olive Press

Apple is investigated in Spain over potential breach of App Store rules

Apple is investigated in Spain over potential breach of App Store rules

Spain’s anti-competition regulator, the CNMC, announced on Wednesday that it

Cystitis in children: Top tips to prevent common summer urinary tract infections from Hospital Quirónsalud Marbella

WITH summer in full swing and temperatures across Spain soaring,