Spread financial intelligence

The Austrian company COINTED has operated ATMs, an exchange for cryptocurrencies and crypto mining. Mining equipment was purchased from various companies around Cointed for 11.5 million euros and purportedly operated mainly in Sweden. In the course of the Cointed / Optioment scandal not only the Cointed founders disappeared, but also the mining equipment and the profits from the mining. Fintelegram follows the trail.. 

The Cointed / Optioment Scandal can be summarized as follows:

  1. In October 2017, in the course of the Cointed ICO, the first allegations of fraud were made.
  2. The ICO was finalized in February 2018 with only 4 instead of the publicly announced 100 million dollars.
  3. in December, the crypto-MLM company Optioment stopped its pay out to its investors.
  4. Cointed founder Christopher Rieder went underground after being accused by Optioment investors of having played a leading role in the scheme.
  5. Fintelegram uncovered irregularities in the Cointed company structure and the disappearance of Cointed Assets
  6. Thousands of investors at Cointed / Optioment lost their investment, an insolvency application was filed.

The Fintelegram trail begins in spring 2016, when technician CHARLI AHO and investor ALFRED DOBIAS founded Crypto Unity OG and – to date – each own 50 percent of it. Their business model in an environment of constantly rising crypto prices is simple and captivating simple: Mining servers should be sold to investors and thus the fixed initial costs (approx. 3,000 euros per device) should be passed on to them. The sold servers are hosted by Crypto Unity OG. These recurring expenses are to be paid via the recurring mining revenues. The investment risk is covered by the investors, the upside by Crypto Unity OG:

Crypto Unity OG wanted to package Miningservers in containers and install it at power plants with renewable energies. These power plants have excess capacities at certain times, which they can sell cheaply. The company wanted to keep its biggest cost – electricity costs – lower than its European competitors.

WACHSENDE WERTE and Crypto Unity
As Fintelegram could see from the accounting documents of Crypto Unity, the Linz-based company provided quite a lot investors for the mining business.

The deal seemed captivating, at least for the operators: for a few thousand euros, an investor buys a mining server. As they cannot profitably operate these servers themselves due to the high electricity price and lack of expertise, Crypto Unity provided the hosting services. In return, the company receives 40% of the gross mining income, 60% goes to the investors who bear the full investment risk. WACHSENDE WERTE sells the mining packages, Crypto Unity operates it.

The Cointed founder CHRISTOPHER RIEDER also allegedly repeatedly referred mining customers to Crypto Unity OG. Through this mediation, Rieder and Charli Aho got to know each other.

Crypto-mining is a business with large numbers. The journalist BARBARA DURAS of the media website DER BRUTKASTEN confirmed after a due diligence of Cointed business documents the transparency report published in the course of the ICO (in the meanwhile deleted article “THE FULL TRUTH ABOUT COINTED”).

Allegedly DELOITTE also has confirmed this report resp. the numbers behind it. Accordingly, Crypto Unity and/or its shareholders sold and operated mining equipment to investors for 11.5 million euros in December 2017.

Mine, yours, ours
In spring 2017, history started to become confusing. Suddenly, Crypto Unity shareholder and CEO Charlie Aho joined Cointed and headed Green Mining acting as CTO. Strengthened by this mining business, Cointed launched an Initial Coin Offering (ICO) in October 2017 and asked for USD 100 million from global investors. In its white paper, the company claimed that Crypto Unity OG had merged with Cointed to operate as the mining division from Cointed. Since Aho and Daniil Orlov (silent partner of Aho in Crypto Unity OG) held a 50 percent stake in Cointed, it can be concluded that they contributed the mining business in return. Too bad that Alfred Dobias, the other 50% Crypto Unity shareholder didn’t know about the transfer of the business unit to Cointed. But it doesn’t matter, because according to the final white paper the mining was done in the Swiss Crypto Group AG, at least in the 2nd half of 2017, or not?

In any case Cointed entered into a hosting agreement with the Swedish mining farm of the company BLOCKBASE (run by Austrians) for the mining business acquired from Crypto Unity towards the end of the second quarter of 2017. The business relationship was short-lived and ended in October 2017. After that, Cointed moved to another Swedish data center and again substantially increased its mining capacities. This was confirmed by the managing director of Blockbase at the request of FinTelegram. He also confirmed that the hosting contracts were concluded with Cointed and Charli AHO was the responsible Cointed Manager.

In the interest of the company’s creditors and investors, it should be noted that several thousand mining servers produced new crypto money every day and probably still do so somewhere. In the crypto-hype of 2017, that was a lot of money. In its transparency report, Cointed claimed to have generated around 3 million euros for investors in the short year 2017. Thus, Cointed and/or Crypto Unity would also have recorded revenues of around EUR 1.2 million in this short year 2017. Impressive for a startup, isn’t it? Projected for a full financial year, this installation value would generate income of at least around 4.6 million p.a. This is approximately the same as the Fintelegram calculation: if it is an Ether-Miner, each device can generate approx. 4 Ether per year. An average price of 400 euros per ether and 3,000 devices would result in 5.6 million euros.

Millions disappeared
So it is proven that these mining capacities actually existed. Now they seem to have disappeared. At least according to Aho these capacities are not in the Cointed and according to accounting documents also not in the Crypto Unity OG, but maybe in the Swiss Crypto Group AG?.

During a book inspection by the Crypto Unity shareholder on the premises of Crypto Unitys accounting company it was found that neither in 2016 nor in total 2017 revenues from crypto-mining were recorded in the accounts. The responsible tax consultant reacted indignantly to the corresponding demand and said that “he knew nothing of any Ether Wallets nor of any hosting contracts”.

Evidently Cointed also has not access resp. information on the Mining business. On the one hand, CEO Wolfgang Thaler requested his partner Daniil Orlov to finally hand over him information on the mining business on the other hand Cointed seems broke. According to a lawyer involved, insolvency proceedings have already been filed.

Where’s the money? Where is the equipment and who continues to operate it? These are the questions Fintelegram would like to ask Cointed CTO Charli Aho. He first promoted that he Crypto Unity business was transferred and operated in Cointed. Meanwhile, he denies that Crypto Unity ever merged into Cointed. Where’s the money, Charli?

Backers in Hong Kong
The search for the funds and assets reminds a little of the film Rat Race with John Cleese. Everyone’s looking for the hidden treasure. What is certain is that investors’ and customers’ money should be somewhere but where it is and how it has been used by whom – that remains the goal of a global puzzle rally.

Since mid-2017, Cointed has integrated its business activities into an internationally nested network that is difficult for outsiders to understand. The holding company is Cointed Ltd in Hong Kong. Also other traces lead to Hong Kong and China. Most recently, Cointed Managing Director Wolfgang Thaler sent a video message from China where he wanted to meet with partners to raise funds for Cointed.

Furthermore, Crypto Unity OG’s accounting ledgers also show some evidence of extremely interesting business connections to Hong Kong. According to accounting and bank records, Crypto Unity OG sold two “Mining Software Licenses” totalling EUR 190,000 to companies in Hong Kong and received the corresponding payments.

This trace to Hong Kong in search of the crypto-mining business of Crypto Unity OG and Cointed Ltd has been investigated – and found – together with auditors and lawyers.

In the interest of Cointed- and Crypto Unity OG creditors, we hope that Charlie Aho will inform the investigating authorities about these business relations. Allegedly Aho wants to support the prosecutors with documents and research concerning the involvement of the Cointed founder Wolfgang Rieder in connection with the Optioment fraud, so pls do not forget to hand over also some evidence and information about these quite interesting Chinese connections of Crypto Unity OG.

We will report shortly on this, as well as on the related insolvency law aspects of Cointed. In the meantime, we ask crypto-mining investors of Cointed to contact us for more details in the interest of clarification. Please use our whistleblower system for messages with or without identity details.

Leave a Reply

Your email address will not be published. Required fields are marked *