Global online exchange and cryptocurrency ecosystem provider MultiBank Group is appealing against a decision dismissing a case it brought against its former joint venture partner, German-based Von der Heydt Group (VDH) in the British Virgin Islands (BVI), accusing it of hiding illegal transactions.  

Owned by Naser Taher, who is in the midst of developing a “one-stop—shop for cryptocurrency, MultiBank Group is a leading financial institution and turned in record profits in 2020 of over $139mn on an annual turnover of over $5 trillion.  

From 2017 to 2020, the MultiBank Group entered a joint venture with VDH. MultiBank Group invested over €43mn into the project, but problems arose after transactions in mutual funds undertaken by VDH were in breach of the European Regulatory Framework, according to MultiBank Group. Subsequently the transactions were found to be in breach of regulations by the Luxembourg Regulators, the CSSF. MultiBank Group said that these problems were confirmed to it in a letter from the CSSF of October 14, 2020.  

The problem came into light in December 2020 when the CEO of Von der Heydt AG informed the Senior Management of the MultiBank Group that the trading Von der Heydt Group undertook was illegal.

"MultiBank Group has generously offered the innocent noteholders who were not involved in the illegality of the Von der Heydt Group to refund their monies, albeit, they have no obligation to do so. However, the Von der Heydt Group did not wish to tell the German noteholders of the offer of MultiBank Group in order to conceal the illegality of trading of Von der Heydt Group,”a source close of the deal told bne IntelliNews. 

In 2018  German police raided the offices of a money manager in Berlin who was suspected of running a ponzi scheme and allegedly conspired to defraud investors. Stephan Blohm, then the CEO of VDH in Luxembourg, was implicated in the German police investigation, as one of the suspected beneficiaries of the scheme.

Amongst MultiBank Group’s complaints VDH failed to reveal the CSSF finding, which detail twelve “severe deficiencies in relation to the functioning of the funds,” ranging from inability to provide the auditor sufficient paperwork and problems with the valuation of assets. The CSSF also found the firm had failed to abide by counter terrorism and anti-money laundering laws, according to the letter, says MultiBank Group.  

The lack of supporting documents lead to VDH’s auditor, KPMG resigning in the spring of 2020 and subsequently a number of the company’s funds were suspended as a result of the CSSF ruling, before their valuations were downgraded in early 2021, according to reports.  

Separately managers at VDH were also accused of using clients money to speculate on the precious metals market, which is banned by EU law for certain types of funds.  

The dispute went to court in October in the BVI where the judge dismissed the case, but is now being appealed by MultiBank Group.

MultiBank Group boasts a daily trading volume of over $7.2bn on its exchange and provides services to an client base of over 320,000 customers from across 90 countries worldwide.  

“The MultiBank Group through its substantial expansion worldwide including the formation of a complete financial ecosystem involving financial derivative and crypto with all ancillary services is now paving the way for the MultiBank Group to undertake a SPAC within 3 years with estimated value of $25bn” Taher, the founder and owner of the Hong Kong-headquartered MultiBank Group said in a statement.

A German language version of this article is avaialble here.