FinTelegram reported today on the sanctions panic in Cyprus. Lawyers, tax advisors, and banks are under massive pressure to stop their activities for individuals and companies affected by the sanctions. Besides Cyprus, Austria has also been a popular money-laundering hub for Russian oligarchs and their companies. It is known that oligarchs invested billions in real estate in Vienna and are currently trying to sell them secretly.
Austrian Lawyer And Their Russian Clients
Currently, the law firm Binder Grösswang (website) is conducting a lawsuit against the European Fund Recovery Initiative (EFRI) in Austria on behalf of the crypto payment processor Mercuryo, controlled by Russian entrepreneurs and financed by oligarchs, because it had published related articles on its website.
The lawsuit seeks to have critical reports about Mercuryo taken offline on the EFRI website. In addition, they want to force EFRI to exert influence on FinTelegram to take reports offline. From our point of view a SLAPP campaign of the Russian owners of Mercuryo with the help of the Austrian law firm.
MRCR Holdings Ltd, registered in Cyprus, owns the Mercuryo scheme and its companies, according to the findings of the Estonian FIU. MRCR Holdings, in turn, was financed by the Russian-controlled venture capital firm Target Global.
According to information available to FinTelegram, Target Global is a controlling shareholder in Cyprus-based MRCR Holdings Ltd behind Mercuryo. According to the logic of the Cypriot authorities, this MRCR Holdings should also be affected by the sanctions, as it is linked to sanctioned persons via Target Global.
The Austrian law firm Binder Grösswang apparently has no problem with its clients controlled and financed by Russian entrepreneurs. For FinTelegram, the question is how to reconcile this with Western sanctions.
The Sanctioned Oligarchs
In 2020 Mercuryo raised €2.5 million from Target Global. In 2021, Target Global led a $7.5 million Series A finance round for Mercuryo. Via their investments, Target Global became a controlling shareholder in the Mercuryo scheme.
Target Global (website) was founded in 2012 by Alexander Frolov Jr, son of the Russian oligarch Alexander Frolov Sr (Forbes list). Russian Oligarchs provided the initial funding of $300 million via Russian companies. One of them was the Russian Invest AG (report here), owned by Alexander Frolov (Wikipedia) and Alexander Abramov (Wikipedia). Both were sanctioned last year.
Target Global was initially set up and operated in Moscow; the group reportedly has over $3 billion in assets under management (AUM).
Conclusion
First of all, it should be noted that one can take whatever position one likes on the war in Ukraine. One can be of the opinion that Russia reacted with the war to the Western provocations by the aspired NATO accession of Ukraine. Many Western experts see it that way. The Ukraine war is a proxy war in the global power struggle of the Americans against the Russians.
Western sanctions are legally binding in the participating jurisdictions regardless of any moral issue. This, of course, applies to Cyprus as well as Austria. Applying the current practice in Cyprus of blocking all companies and individuals that are or have been associated with sanctioned persons or companies, both MRCR Holdings in Cyprus and its affiliates should be affected.
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