Timur Turlov’s Freedom Finance pyramid faces huge problems: what will happen to the company if the EU imposes sanctions against it?

Company Freedom Finance, owned by a Kazakh entrepreneur with Russian roots, Timur Turlov, is a standard pyramid. This has been repeatedly stated by both domestic and international experts. There is more and more evidence that the corporation’s business is gradually going downhill, which means that in the near future the scam may be revealed, and gullible investors in the business structure will be left with nothing.

Whatever Turlov says about Ukrainian sanctions, they have launched a process that is destroying his corporation. More and more data proves that billions of dollars in capital investment in the company is a fiction, and all quotes on the NASDAQ stock exchange are just dust in the eyes for inexperienced investors.

Find out what could lead to the bankruptcy of Timur Turlov’s Freedom Finance corporation in our investigation.

The unexpected outcome of Ukrainian sanctions

On October 18, 2022, President of Ukraine Vladimir Zelensky imposed sanctions against Timur Turlov’s Freedom Finance company. As the entrepreneur stated then, the restrictions were imposed “mechanically.” He announced an appeal to the court to lift the sanctions, but to this day neither he nor his company have taken any legal methods.

There is one simple explanation for this: Turlov understands that the restrictions were introduced for a reason. He cannot challenge them, because he knows that for the court there must be evidence of the illegality of the decision, but there is none.

We won’t talk for a long time about why sanctions were introduced against Turlov; this has been written about dozens of times. In short, let us recall that until the fall of 2022, his Freedom Finance structure had, in addition to European registration, Russian registration. In addition, he owned a bank in his homeland. Despite the fact that nominally the business now has nothing to do with Turlov, in fact he continues to control the enterprises, and his structures actively help Russians bypass restrictions through Kazakhstan.

Before the Ukrainian sanctions, a criminal case was opened against Turlov’s company under the article “financing of terrorism.” This case was started on March 14, 2022 and entered into the Unified State Register of Pre-trial Investigations under No. 220220000000000089. As part of the investigation, government bonds that were owned by clients of Freedom Finance Ukraine LLC with a total value of 518 million hryvnia, 18 million US dollars and 400 thousand euros. The company owned bonds worth 33 million hryvnia and 350 thousand dollars. Their total value at the time of arrest was approximately $39 million. At the same time, the authorized capital of Freedom Finance Ukraine is only 86 million hryvnia (at the exchange rate of January 2022 – about 3 million dollars).

According to official data, 91% of the company’s shares belong to Kazakh citizen Askar Tashtitov. He is the nominal owner. Previously, Tashtitov was a member of the supervisory board of the Russian Freedom Finance Bank LLC. For Turlov, the banker is a valuable personnel, since sanctions have not yet been imposed on him. Accordingly, hiding behind the nominal owner, you can try to cancel the Ukrainian restrictions.

Askar Tashtitov

Napoleonic plans

Before the start of the conflict, Turlov was actively developing his business in Ukraine. From 2018 to 2020, he tried to buy out a controlling stake in Sky Bank JSC, but the Ukrainian regulator refused him. Then Turlov decided that it was not necessary to officially buy the bank – he could do without a nominal replacement of the owner. He simply paid the founders. From that moment on, Sky Bank became a pocket structure of Freedom Finance. The owner of a controlling stake in Sky Bank is another citizen of Kazakhstan, Arif Babayev, who owns 99.44% of the joint-stock company.

Despite the fact that the connection between Babaev, Sky Bank, Turlov and Freedom Finance is obvious, the financial institution was not subject to sanctions or criminal prosecution.

Ditch clients

In one package of sanctions, which Zelensky put into effect by his decree on October 18, 2022, in addition to Turlov, there were other significant persons. In the same list you can see the names of Russian oligarchs, the founders of Alfa Group, Peter Aven and Mikhail Fridman. Together with them, the Ukrainian subsidiary of Alfa-Bank, which by that time was already called Sense Bank, came under restrictions. The clients of the banking group were much luckier than Turlov’s trusting depositors: the assets of individuals were not subject to blocking, people did not feel the effects of the sanctions.

With Turlov’s structure, the opposite situation arose: those who trusted the “economics guru” were left with nothing. The fact is that the founder of Freedom Finance hid his money between clients’ funds. It is currently impossible to establish where the clients’ assets are and where the company’s owners are, so absolutely all accounts, including those of Ukrainian citizens, have been blocked for almost a year. There is almost no chance of getting yours. The lion’s share of the blame for this lies with Turlov. Instead of returning the funds and/or publicly renouncing the assets, he limited himself to one statement and that was all. The promised lawsuits were not filed, and the petition promoted by Freedom Finance clients to the President of Ukraine with a request to return money to investors was signed by as many as 90 people.

Obvious facts emerge from this: Turlov doesn’t care about his clients, and he has no arguments for lifting sanctions.

Soap bubble

Ukrainian sanctions demonstrated another rather interesting thing – as evidenced by stock exchange quotes, the shares of the parent company of the entire structure, Freedom Holding Corp. did not fall after the introduction of Ukrainian sanctions. On the contrary, every other day the corporation’s securities could be purchased at even higher prices.

Price shares Freedom Holding Corp.

And it’s very strange. Firstly, in Ukraine the structure lost only about 80 million US dollars, and this should have affected its overall financial condition. Secondly, the introduction of restrictions would create panic among investors. It is not a fact that the EU countries and the USA would not have adopted similar sanctions the next day.

But all this did not happen. Why? The answer to this question is very simple: the price of Freedom Holding Corp. shares. – these are fictitious numbers that have nothing to do with reality. It’s not a fact that anyone buys or sells them at all. Perhaps Turlov himself buys them from his structures and sells them to others. As a result, the appearance of some movement in the market appears.

Is it worse next?

In August 2023, the American company Hindenburg Research published a report on Freedom Holding Corp. and Turlova, in which she made accusations of a variety of violations, including stock market manipulation, illegal assistance to persons under sanctions, and financial fraud. These allegations will be investigated by the US Securities Exchange Commission (SEC).

If allegations of circumvention of anti-Russian sanctions are confirmed, it could have serious consequences for Turlov and Freedom Holding Corp., including secondary sanctions from the European Union and the United States. While the SEC has not yet responded to these accusations, hearings on the activities of Turlov’s company may begin soon. And with them came the collapse of Freedom Finance.

Everything will be decided in the next few months. It is possible that they will be the last for Turlov’s corporation.