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In the early hours of February 7, 2021, the calm waters of the Dubai Creek canal became the final resting place of Stanislav Drugalev, the architect of the infamous crypto exchange Garantex. As the sun crept over the horizon, casting its golden hue on the tranquil scene, the discovery of Drugalev’s lifeless body disrupted the serenity. That day became a chilling climax in the cryptocurrency industry. 
Under Drugalev’s stewardship, Garantex became a center for those wanting to exploit the potential of blockchain technology, drawing in traders, investors, and speculators worldwide. Stanislav Drugalev’s untimely demise hit the crypto community hard. 
Was it a mere twist of fate or the result of a complicated mix of events involving finance, power, and geopolitics? This enigma is the cornerstone of Cryptopolitan’s investigation. 
<h2 class="wp-block-heading" id="garantex-the-rise-of-a-crypto-empire">Garantex: The rise of a crypto empire</h2> 
Without a doubt, Garantex emerged as a formidable force in the crypto industry. Alongside Drugalev were two other founders: Sergei Mendeleev, a seasoned financier, and Alex Ntifo-Siao, a sharp-minded strategist. Together, they created a platform that would soon become synonymous with the blockchain revolution. 
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 <img loading="lazy" decoding="async" class="wp-image-542451 size-full" src="https://www.cryptopolitan.com/wp-content/uploads/2024/06/image-158.png" alt="Garantex" width="420" height="240" srcset="https://www.cryptopolitan.com/wp-content/uploads/2024/06/image-158.png 420w, https://www.cryptopolitan.com/wp-content/uploads/2024/06/image-158-300x171.png 300w" sizes="(max-width: 420px) 100vw, 420px">
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 Stanislav Drugalev
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Garantex’s creation was partly inspired by the active tech hubs of Estonia, a nation known for its digital-forward approach. Registered within this European tech haven, Garantex began as a modest venture but rapidly grew into an influential player. 
The platform’s success was catalyzed by a global phenomenon – the COVID-19 pandemic. As the world grappled with the pandemic’s upheaval, traditional financial systems fell short, prompting a surge in cryptocurrency trading and the subsequent bull run of 2021. 
Confined to their homes, investors turned to digital platforms, seeking refuge in the decentralized nature of cryptocurrencies. Garantex, with its strong infrastructure and strategic positioning, capitalized on this tidal wave of interest. 
Fueled by the exchange’s daily turnover reaching a massive 300 million rubles, the lifestyle it afforded its owners was one of luxury and excess. Back then, we saw several lavish expenditures, with investments from upscale real estate to high-end luxury items, showcasing the rapid financial success of Garantex and its founders. 
<h2 class="wp-block-heading" id="the-shadows-behind-the-success">The shadows behind the success</h2> 
As Garantex’s influence in the cryptocurrency market was growing, a new character entered the stage. Pavel Karavatsky, a man whose past was as complex as the networks he brought, suddenly became a key player in Garantex. 
Karavatsky’s background painted a picture of a man who had deftly maneuvered through the corridors of power. His ascent began in <a href="https://www.cryptopolitan.com/russia-china-stop-using-dollar-permanently/" data-type="post" data-id="528492">Russian</a> law enforcement and later moved on to the financial sector, where his career took a remarkable turn. 
By 2017, Karavatsky was on the board of directors at Peresvet Bank, a financial institution controlled by Rosneft, one of Russia’s oil giants. This appointment was a calculated move orchestrated by influential figures within the Russian establishment. 
Karavatsky’s rise was entirely due to his connections with Oleg Feoktistov and Ivan Tkachev, two names that resonate with power within Russia’s security apparatus. Feoktistov, an ex-deputy head of the FSB’s Internal Security Service and an advisor to Rosneft’s head has a reputation for being formidable in the intelligence community. Tkachev, known for his influence in the “K” department, was also there. 
Karavatsky’s entry into the Garantex was due to his known association with co-founder and commercial director Alexander Ntifo-Siao, whose own ascent within Garantex had been meteoric. 
From his beginnings in the construction industry in St. Petersburg to his entry into cryptocurrency trading in Moscow, Ntifo-Siao had proven himself a formidable businessman. His partnership with Karavatsky, however, suggested a subtle change in Garantex’s balance of power. 
Ntifo-Siao and Karavatsky’s interests came together in a business partnership that deeply affected the company. This partnership grew stronger on February 4th, 2021, when both became beneficiaries of Fintech Corporation LLC, an affiliate of Rosneft. This move clearly aimed to take control of Garantex. 
<h2 class="wp-block-heading" id="the-enigma-of-drugalev-s-death">The enigma of Drugalev’s death</h2> 
The sequence of events leading to the tragic discovery of Drugalev’s dead body began with his unexpected visit to Dubai. Known for his reserved nature, Drugalev’s presence in the emirate was a departure from his usual routine. The hours preceding the discovery were shrouded in ambiguity, with little to no witnesses to his final moments. 
The theories surrounding his death vary wildly. Some believed it was an accident, a tragic consequence of an ill-fated swim. Others speculated that it was suicide, driven by unknown personal demons or professional pressures. However, a more sinister theory suggested foul play, a hypothesis fueled by the financial and political ties surrounding Garantex. 
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 <img loading="lazy" decoding="async" class="wp-image-542453 size-full" src="https://www.cryptopolitan.com/wp-content/uploads/2024/06/image-159-1.jpg" alt="Garantex" width="699" height="466" srcset="https://www.cryptopolitan.com/wp-content/uploads/2024/06/image-159-1.jpg 699w, https://www.cryptopolitan.com/wp-content/uploads/2024/06/image-159-1-300x200.jpg 300w" sizes="(max-width: 699px) 100vw, 699px">
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 Oksana Drugaleva and her husband, Stanislav Drugalev. Credits: Wall Street Journal
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The absence of critical evidence, such as Drugalev’s laptop, which reportedly contained access to crypto wallets and sensitive company data, further deepened the conspiracies. It left room for speculation, and the official narrative of the incident remains inconclusive to this day, leaving a trail of unanswered questions about the true nature of Drugalev’s demise. 
<h2 class="wp-block-heading" id="the-aftermath">The aftermath</h2> 
The effects of Drugalev’s untimely death were immediate and profound, plunging Garantex into turmoil. In the wake of the tragedy, Alex Ntifo-Siao and Pavel Karavatsky swiftly moved to solidify their positions within the company. 
Ntifo-Siao, using his position as the commercial director and newfound ties with Fintech Corporation, began to assert his influence over Garantex’s operations. He wanted to reshape the company’s direction to align with his and Karavatsky’s vision. 
Karavatsky, on the other hand, operated with a subtlety that belied his ambitions. He orchestrated a series of strategic moves with his buddy that altered the company’s trajectory. Their actions pointed to a coordinated effort to take over Garantex. And they succeeded. The company instantly found itself at the mercy of Russian authorities. 
The power play at Garantex began almost instantly, with charter changes and board reconfigurations.&nbsp;The charter, once the foundational document underpinning Garantex’s operations, became a tool in their hands. The document was amended, altering the governance and shareholder rights rules.&nbsp; Mind you; this happened barely days after Drugalev’s death. Board reconfigurations brought new faces and pushed out majority of the old ones. 
In the midst of these boardroom battles, the underlying goal was clear: To steer Garantex in a direction that served the interests of a select few, interests that extended beyond the company’s walls into global finance and state politics. 
Meanwhile, a legal battle had ensued, spearheaded by Drugalev’s father himself, Konstantin Khazan. The lawsuit, filed against the new owners of Garantex, revolved around the illicit changes to the charter.&nbsp; 
Khazan contended that these amendments, made during an emergency shareholder meeting, were unethical and illegal. He argued that they effectively excluded any possibility of transferring Drugalev’s company shares to his legal heirs. Moreover, the new charter version conspicuously omitted any provision for compensating the heirs for the massive financial and operational stake. 
The lawsuit, lodged in the Tverskoy District Court of Moscow, was initially met with resistance and resulted in a ruling against Khazan. However, undeterred by this setback and inspired by the imposition of U.S. sanctions against the new owners, Khazan persisted in his legal fight.&nbsp; 
His perseverance paid off when, on appeal, the Moscow City Court acknowledged the merits of his case. This legal victory was a significant turning point, allowing Khazan to finally reclaim a 33% share of Garantex, thereby restoring a modicum of justice to the Drugalev family in the wake of their tragic loss and the subsequent corporate power struggles. 
Garantex also found itself in a labyrinth of other legal battles and ownership disputes. The Estonian legal entity, a key part of&nbsp; Garantex’s operations, became the battleground. 
Legal maneuvers began to surface, with documents and powers of attorney being strategically used to blatantly change the exchange’s governance and ownership. Some of these documents were visaed in the UAE and others in Estonia. 
<h2 class="wp-block-heading" id="the-invisible-hand-of-the-russian-government">The invisible hand of the Russian government</h2> 
The machinations within Garantex did not occur in a vacuum. An invisible hand was at play, shaping the events from the shadows. This hand belonged to entities within the Russian government and intelligence services, whose interests in Garantex went beyond financial gains. 
Pavel Karavatsky’s involvement, with his deep ties to Russian elites and security apparatus, is all the proof you need to realize that. His ascension to the top of Garantex was a carefully elaborated political strategy. So yes, the theory of government-backed financial manipulation gained traction. 
The rapid changes in Garantex’s ownership and control pointed to a coordinated effort to redirect the company’s resources and capabilities to serve broader state interests. This theory was further strengthened by the shadowy nature of the transactions and the involvement of entities linked to the Russian government. 
With the internal power shifts and external influences now firmly in place, Garantex underwent a profound and far-reaching transformation. The crypto exchange began to mirror the strategic interests of its new leadership and governmental backers. 
Under the stewardship of Alex Ntifo-Siao and Pavel Karavatsky, Garantex’s focus shifted, aligning more with the objectives of Fintech Corporation LLC and, by extension, the entities connected to the Russian government. 
The transformation also raised critical questions about the role of state actors in private enterprise, especially in the cryptocurrency industry.&nbsp; 
<h2 class="wp-block-heading" id="the-animation-studio-and-hamas-side-plot">The animation studio and Hamas side plot</h2> 
Parallel to the main narrative of Garantex, a side plot was happening. This subplot centered around Flip Animation Studio, a seemingly unrelated business venture that, upon closer examination, revealed deep connections to Garantex and the broader financial machinations at play. 
It began with Sergey Chunaev, an ex-policeman with a shady past, who became actively involved in the animation studio’s operations. Chunaev, known for his ties to influential Russian figures and his role in various corporate strategies, took over Flip Animation Studio as CEO towards the end of 2020. Initially owned by Anna Chernykh and Vitaly Glovyak, the studio saw a huge transformation under Chunaev’s leadership. 
Chernykh, an artist, and Glovyak, a former driver with connections to influential business entities, initially seemed like unlikely candidates for ownership of an animation studio. 
Under their tenure and later under Chunaev, Flip Animation Studio became a central point for financial activities that extended beyond the animation industry. The studio was allegedly used as a front for laundering money, with ties to various underground financial operations, including Garantex. 
The company, already under scrutiny for its sudden change in ownership and management following Drugalev’s death, was now linked to a scheme that purportedly facilitated illicit financial flows. This scheme was not limited to corporate profits but allegedly extended to financing organizations like Hamas. 
Despite the sanctions and serious nature of these allegations, Garantex’s operations in European jurisdiction continued seemingly unhindered. The interconnection between Flip Animation Studio and Garantex was further complicated by the involvement of Pavel Karavatskiy, Oleg Feoktistov, and Ivan Tkachev. 
These men, known as the “Sechensky special forces,” orchestrated a series of financial and corporate maneuvers. Their actions suggest a coordinated effort to control Garantex and exploit its resources and capabilities, which apparently included financing sanctioned organizations. 
In addition to its financial irregularities, the studio’s operations under Chunaev also involved a series of legal strategies aimed at consolidating control and obscuring ownership. Legal battles over the rights to certain animation projects, particularly the “Jingliks” series, became renowned. 
These legal disputes often involved companies and individuals with direct or indirect connections to Garantex. Moreover, the animation studio’s financial records and transactions raised questions about the true nature of its business. Despite declaring significant costs for animation production, the actual expenditure and the studio’s operational scale did not align with these reported figures. 
This discrepancy pointed to the possibility of the studio being used as a vehicle for money laundering, with inflated costs serving as a cover for moving large sums of money under the guise of legitimate business expenses. 
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 Garantex’s story shows how government and secret services can negatively affect industries like cryptocurrency exchanges. While appearing to regulate and oversee, these entities are far greedier than the crypto scammers they say they are stopping. 
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Cryptopolitan reporting by Jai Hamid and <a href="https://hk.linkedin.com/in/ybelkin" rel="nofollow noopener" target="_blank">Yaros Belkin</a>

Shadow play in crypto waters: Uncovering government greed and deceit in Garantex

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