Co-Founders of a Lithuanian Crypto Coin Scooped up Luxury Property While Investors Were Left in the Lurch #CriptoNews

Pre-sales of the currency appeared to be a hit. On August 28, 2017, Bankera tweeted: “Please lower your orders so everyone could get some tokens!”

The following month, the company announced that it had reached its initial target of 25 million euros nine days ahead of schedule. In February 2018, it said it raised a total of 100 million euros.

Andreas Horb, a German financial advisor, told OCCRP that the prospect of weekly payouts was a “key selling point” and helped convince him to buy about 2,000 euros worth of BNK.

Despite the apparently enthusiastic uptake of the BNK token, more than six years on, its market capitalization — the total value of all issued tokens — has fallen to just $1 million, according to data from the Ethereum blockchain, which hosts the token. As BNK’s value collapsed, so did the payments to coin-holders. Eventually, in 2022, the revenue-sharing scheme was halted. But some investors say problems emerged much earlier.

“Things started to change in 2018, a few months after the ICO launched,” Horb said. “The payouts began to drop significantly below the promised amount.”

Lawyers for Bankera UAB said that during the ICO the token was purchased “by speculators hoping for a ‘boom’,” and that the “relatively early abandonment of the BNK tokens by such individuals naturally played a part in the slide in value.”

As weekly earnings from the revenue sharing scheme dropped, Horb said he and his friends tried to contact Bankera’s founders and managers: “We had regular conversations with them at first, but eventually they stopped responding after a wave of investor complaints.”

Ryan Woodhouse, a British telecoms engineer, told OCCRP he bought 4,000 British pounds worth of Bankera tokens.

“The concept looked amazing,” he said. But, he added, “it quickly became clear that the token had lost all its value when they stopped paying the weekly returns.”

The decline in the value of the BNK tokens underscores the risks of investing in cryptocurrency, a largely unregulated area of finance, experts said.

“Investing in cryptocurrency at that time was like buying magic beans,” said Ray Blake, a financial crime expert and director of the Dark Money Files.

RUSI’s Westmore described the rash of ICOs in 2017 and 2018 as “the epitome of the wild west of crypto,” adding that people facing losses from cryptocurrency investments often struggle to win compensation due to the lack of oversight of the sector.

The Bank of Lithuania told 15min that it had received “a few individual complaints” about Bankera’s ICO, but said it had directed the complainants to the financial supervisory authorities in the British Virgin Islands, where Finalify is registered.

Half a World Away

In January 2018, in the middle of the ICO, Karalevičius, Dobiliauskas, and Mockevičius were also buying a bricks and mortar bank half a world away.

Pacific Private Bank Ltd., known as PPB, is a boutique financial institution in Vanuatu, a Pacific nation inhabited by around 300,000 people that has been criticized for facilitating international tax avoidance and providing “golden passports” to people with questionable backgrounds.

On its website, PPB describes its mission as serving “wealthy, private clients from around the world” with a focus on wealth and asset management and offering “tailored investment solutions.”

“We accommodate to [sic] the individual objectives of every customer by providing personalized private banking services.”

Bankera’s co-founders heralded the purchase of PPB as a step toward becoming “a bank for the blockchain era and a one-stop store for all financial services,” a goal which would now be delivered “ahead of schedule.” The sale price was not disclosed.

The month after the trio bought PPB, millions of euros started moving from Spectro Finance’s account at Pervesk — where BNK purchasers had sent their payments for tokens — into an account also held by Spectro Finance at PPB, leaked records from the Vanuatu bank show.

The first transfer — 15 million euros — took place on February 14, 2018, just weeks before the ICO’s conclusion. Another 2.8 million euros were sent six weeks later, followed by 12 million euros six months after that. The leaked bank records give no purpose for the transfers, which are listed only as “transfer between own accounts.” An additional 15 million euros were sent in other transfers between August 2020 and September 2021.

Lawyers for Bankera UAB said it was “not disputed that funds were moved into accounts with Pacific Private Bank,” but added that there is no “obligation to publicly set out the use of all the funds raised by the ICO.”

In November 2019, 25 million euros were sent from Spectro Finance’s PPB account to another PPB account held by Finalify, the British Virgin Islands company that issued the Bankera tokens. The credit was the first activity in the Finalify account.

In April 2021, the same Spectro Finance account also transferred 20 million euros to a PPB account held by Spectro Finance Systems Ltd., another firm registered in the British Virgin Islands in 2019 by Mockevičius, one of Bankera’s founders.

All three PPB accounts — Spectro Finance’s, Finalify’s, and Spectro Finance Systems’ — pledged funds to back loans by PPB to Bankera’s three young co-founders or their companies.