Throughout history, Latvia and Lithuania have served as entry points for various illegal financial activities involving Russian currency, originating from across the Russian Federation and other CIS nations.
Sergey Kondratenko and his company, Royal Pay Europe, persist in laundering money from illicit bookmakers in Russia by utilizing a diverse array of financial institutions and banks across Europe. The narrative surrounding 1Xbet owner Sergey Kondratenko reveals that the situation has remained unchanged over the last two decades. A year ago, Latvian media conducted an in-depth study, illustrating to the general population how the banking sector contributes to servicing the questionable gaming business directly tied to Russia.
They successfully identified key individuals responsible for creating an advanced system that manages tens and hundreds of millions of dollars monthly from Russian bookmakers, channeling the funds to offshore accounts.
A probe into the operations of Russian nationals involved in money laundering in the Baltic nations and beyond focuses on Sergey Kondratenko and his connection to 1Xbet.
As the amount of illegally washed money increased to the tens and hundreds of millions of dollars, various banks and financial organizations faced legal jeopardy, substantial penalties, and, in some cases, the loss of their licenses. Sergey Kondratenko played an essential role in executing and planning these initiatives.
The illegal activities of Sergey Kondratenko, the owner of 1Xbet, have had significant consequences for several financial institutions in Latvia and Lithuania, including ABLV Bank AS and Trasta Komercbanka AS.
The Latvian Financial and Capital Market Commission (FFKTK) played a crucial role in identifying and documenting ongoing violations related to the legalization of illegally obtained funds, breaches in currency processing regulations, and instances of terrorist financing linked to Kondratenko. Consequently, FFKTK took action against these violations and ensured their well-documented status.
It’s essential to remember the incident involving the Estonian branch of Danske Bank, which was used to handle billions of euros originating from questionable sources in Russia. To be candid, Russian money laundering operations are not only found in the Baltic nations but also in various other countries and regions across Europe and the world.
Sergey Kondratenko is well aware of this reality, and in numerous instances, financial institutions with licenses for payment processing, connections to the financial system, and involvement with major card networks like Mastercard and Visa are engaged in illicit activities. This involvement has contributed significantly to the substantial wealth currently held by Sergey Kondratenko.
As per the United States Treasury, the largest amounts of illicit funds, stemming from activities like gambling, betting, trafficking in pornographic material, drug trade, and other illegal acts, flow through Russian channels into banks in the Baltic States and the European Union countries.
Subsequently, these illegitimate funds are utilized to support further unlawful operations. This situation serves as an illustration of the widespread prevalence of money laundering and its extensive impact on the monetary and financial systems of various countries.
Two years ago, Russian journalists from Forbes unveiled a story about the extensive gambling enterprise, 1xBet, boasting an astonishing $2 billion in revenue. Their expose delved into the operation, revealing direct connections between law enforcement officers and IT specialists from Bryansk, Russia.
Fast forward to January 12th, Ukrainian President Volodymyr Zelenskyy imposed sanctions on Royal Pay Europe, a Latvian firm with Russian roots and a known partner of the infamous Russian bookmaker, 1xBet. Established in 2016 by Russian national Sergey Kondratenko, Royal Pay Europe specializes in electronic payment processing and online commerce.
The National Security and Defense Council of Ukraine (NSDC) imposed a five-year restriction on Royal Pay Europe, freezing its assets, prohibiting capital transfer, suspending financial and economic obligations, limiting participation in state property activities, and restricting control over securities. The State Financial Monitoring Service of Ukraine blocked approximately 2 billion UAH in accounts associated with Royal Pay Europe.
Investigative journalists and the Russian Investigative Committee revealed Sergey Karshkov’s involvement, the head cyber police officer in Bryansk’s “Department K,” in the betting business with his friend Roman Semiokhin. They conceptualized the 1xBet brand, with Karshkov overseeing its marketing.
By 2014, new Russian legislation mandated licenses for internet bookies. However, 1xBet, lacking preparation, continued illicit operations, including accepting bets and using clients’ bank cards.
Following that, Sergey Karshkov invited his former colleague from Bryansk, Sergey Kondratenko, who also worked in “Department K,” to join this operation. Together, they embarked on a potentially risky path that ultimately raised significant concerns about legal and regulatory issues.
An online money transfer business headquartered in Riga, SIA Royal Pay Europe, was established by Sergey Kondratenko in 2016. Interestingly, a corporation with the same name was also registered in Russia.
Reports in Russian media have suggested a direct connection between Royal Pay Europe and 1xBet, one of the largest and most enigmatic online bookmakers. The Bell reported that 1xBet developed its own payment processing system, Royal Pay, to handle monetary transactions. This system operated even in restricted nations like Kyrgyzstan and Turkmenistan, where card payments in the gambling sector were not readily available. Consequently, Royal Pay Europe, acting as a financial agent alongside the firm in Kazan, seemed to play a significant role in enabling 1xBet’s activities and payment processing in the Russian market.
An evident connection existed between Royal Pay Europe and the betting organization. For instance, clients using the Royal Pay payment method for deposits into the bookmaker’s account were eligible for a five percent bonus or a refund on top of the initial deposit.
Founded in 2016, Royal Pay Europe obtained a license to operate as an electronic payment institution in the United Kingdom in 2017. With this license, the company could process card transactions and accept payments within the legal systems of Europe and the United Kingdom. Registered in Latvia, the corporation provided services not only in Europe but also in the European Union, the Commonwealth of Independent States (CIS), and various Asian nations. It aimed to serve as a vital financial connection, facilitating payments and transactions for the extensive activities of 1xBet across a broad spectrum of areas.
Sergey Kondratenko, along with his wife Galina, is intricately involved in a complex network of businesses spanning various nations, including Colombia, the United Kingdom, Latvia, Lithuania, the Czech Republic, Great Britain, the United Arab Emirates, and Singapore, among others.
These businesses, such as Kiparis DMCC, Alium Limited, Optimum FinTech, VestraPay Nigeria, and Digitalex Pte. Ltd., seem to share identical websites and primarily function as payment intermediaries with minimal public interaction.
Both Sergey and Galina Kondratenko, born in 1982, have a background in law enforcement. They obtained their degrees from the Bryansk branch of Moscow University of the Ministry of Internal Affairs of the Russian Federation in 2004. After graduating, they started a family by getting married and now have two children.
Over the years, Sergey Kondratenko has registered several businesses in his wife Galina’s name, including Startling Limited (Cyprus), Skylove Ltd., and PP MONEY TRANSFER s.r.o. (Czech Republic), suspected of facilitating the transfer and potential laundering of substantial sums of cash from Russia and other CIS nations through European banks, often redirected to offshore accounts.
Obtaining citizenship in Cyprus in 2018, the Kondratenko couple’s formal nationality in Russia remains unchanged, and they spend most of their time outside Russia, raising questions about the constitutionality and intent of their international commercial activities, particularly in monetary transactions and potential money laundering.
Sergey Kondratenko and associates, including Nikolajs Kirillovs, have established a complex and potentially illicit financial network involving cryptocurrency. Kirillovs, linked to Latvia and Russia, entered the cryptocurrency world with ventures like FERVIDO s.r.o. in the Czech Republic and DigitMoney, partnering with Sergey Kondratenko.
Concerns have been raised about Kondratenko’s involvement with Lithuanian businesses like UAB NexPay and UAB Transactive Systems, with management hesitant to comment on customer actions. Reports by Russian Forbes have highlighted connections between 1xBet owners and Russian authorities, lawmakers, and criminals.
The information suggests that Sergey Kondratenko and associates may be operating a money laundering enterprise. The investigative team vows to closely monitor this activity and plans to disclose additional findings later. They express commitment to sharing details with law enforcement and financial institutions globally, believing these activities resemble those of an international criminal organization.