The Scandal

Unfair exclusion

In January 2018, a company controlled by Alimov transferred the 110/10 kV Steel substation to Rashit Makhat's Prima Investment Company for $159 000, which was significantly lower than its market value at that time of $2.5 million. Wherein, Alimov invested these funds back into the modernization of the substation without any personal remuneration.

Alimov invested about $1 million of his own funds in the restoration of the Steel substation and the facilities of a building of the first mining farm of ABK. He also made a deposit of $1.2 million to help MMK purchase an additional power plant to expand GDA's operations. He also helped MMK conclude this deal thanks to his contacts.

Throughout his cooperation with MMK, Alimov was promised that as soon as the legal entity representing this project was registered, he would be allocated the promised 35% of the shares of MMK's 50% share in GDA.

Click here for Andrey Kim's message to Yermek Alimov, reassuring him that he is a shareholder in the deal - sent on 16 February 2018

However, unbeknownst to Alimov, Zenitka Limited (later Powerry Limited, and then its current name Genesis Digital Assets Limited) had already been registered in Cyprus in June 2017 to manage mining assets. Alimov never became a shareholder of this company.

Since October 2018, Alimov has stopped receiving bitcoins from the project. MMK, having received reasonable requests to speed up the process of formalizing Alimov's participation in the project and despite the opportunity to meet in London, where MMK lived and studied, was only able to meet in Astana in March 2019. During this meeting, the first signs and “threats” appeared that MMK would not fulfill its agreed obligations.

Until September 2020, the GDA's ownership structure changed several times. But on this date, Makhat and Kim officially joined Mirakhmedov, who was already a shareholder. Unfortunately, they still did not transfer the agreed share to Alimov, but distributed it among themselves. From this moment on, Alimov considers himself unfairly excluded from the project.

Example of the benefit derived from Alimov's participation in the GDA project in Kazakhstan

When the future of the project was in jeopardy due to the fact that MMK was unable to fulfill its obligations to GM, Alimov invested his electric substation "Steel" into the project at an incredibly low price - $159 000, immediately reinvesting the money back into the project. At that time, this was the only way to save the project. MMK guaranteed him that he would receive much more money from his share in the company and cryptocurrency in a future joint venture, but the shares due to him were never transferred.

An up-to-date expert valuation of constructing an electrical sub-station from scratch, with the equivalent power to Stal, suggests that its value is around $46 million*.

$45,841,000

Therefore, MMK saved around $45,841,000 by defrauding Alimov instead of investing in a new asset. This is just one example of multiple instances where Alimov was used to pay for the project's implementation and not rightfully compensated.

*State expertise data on the facility built in the city of Astana according to budgetary costs

Key Players

Abdumalik Mirakhmedov

Executive Chairman and co-founder of GDA, a commodity trader originally from Uzbekistan. Worked as a senior executive in the ERG group of companies (formerly ENRC). Owned his own trading business in partnership with Trafigura, one of the world's leading commodity traders. He has close ties to ruling families, high-ranking government officials and oligarchs in Kazakhstan. He initiated and played a central role in the creation of the GDA project and represents Kazakh interests in the company.

Rashit Makhat

is a co-founder of GDA and is closely associated with the family of the first president of Kazakhstan, Nazarbayev, and senior Kazakh officials. He has served on the board of directors of a number of large public and private corporations in sectors such as telecommunications, cellular communications, mining and banking.

Has extensive connections and influence in the security forces of Kazakhstan, such as the Prosecutor's Office, Anti-Corruption Agency, police, courts and the National Security Committee. His capabilities were clearly demonstrated in the criminal prosecution of journalist Makhambet Abzhan.

Andrey Kim

is the CEO and co-founder of GDA. He is actively involved in the operational side of GDA projects. He is a close confidant of Makhat and is responsible for the day-to-day responsibilities of GDA: Bitcoin mining, monitoring the activities of all crypto farms and their uninterrupted provision of high-speed Internet and stable energy supply, converting digital currency into fiat currency, distributing Bitcoins among the company's partners in accordance with the agreed shares.

Yermek Alimov

is a Kazakh entrepreneur and investor. During this period (2016-2017), he was the head of JSC “Astanaenergoservice”, which owns the capital's energy facility.

Genesis Digital Assets (previously Zenitka Limited and Powerry Limited)

is a global Bitcoin mining powerhouse that has generated over $1 billion in Bitcoin to date. GDA was incorporated by MMK and Genesis Mining Limited in a 50/50 partnership. Today, GDA is an industrial-scale bitcoin mining operator with operations in Kazakhstan, Sweden and the US.

Genesis Mining Limited

is a highly successful global cryptocurrency mining business incorporated by Marco Streng and Marco Krohn. Genesis Mining partnered with MMK to create GDA in Kazakhstan.

FTX

One of the largest crypto exchanges in the world, which crashed in November 2022. Beginning in August 2021, the exchange's venture capital arm, Alameda Research, made a number of significant investments in GDA, initially totaling approximately $100 million. In total, FTX and Alameda Research invested $1.15 billion in GDA.

Sam Bankman-Fried

In October 2021, FTX founder Sam Bankman-Fried, now facing securities fraud and wire fraud charges in the US, joined GDA's board of directors. He left the board of directors when FTX filed for bankruptcy in November 2022. At the end of October 2023, a Manhattan federal court found him guilty of all charges, during which it was proven that he stole $8 billion from users of the exchange.

The case of Makhambet Abzhan

Makhambet Abzhan is a Kazakh journalist who is renowned for exposing corruption among high-ranking officials and dishonest oligarchs, publishing on his Telegram channel Abzhan News.