Monaco opens Zondacrypto probe as Poland alleges pyramid scheme

Law enforcement authorities in Monaco have opened an investigation into Zondacrypto, the failed Polish exchange known for multiple sponsorships in the Principality.

News of the Monacan probe comes amid a growing scandal in Poland, where the collapse of the coin trading platform left thousands of users without access to their funds and raised serious questions about its role on the country’s political scene.

Monaco to check Zonda for money laundering

The crash of the Polish-rooted digital-asset exchange Zondacrypto is reverberating across the Old Continent, far beyond its main market.

The Estonia-licensed crypto trading platform, which was one of the largest in Central and Eastern Europe, is now under investigation in Monaco.

The Prosecutor’s Office of the small but very rich city-state on the French Riviera has opened a money laundering case against Zonda, local media reported Wednesday.

Law enforcement officials decided to act based on materials published in the foreign press and a filed complaint, according to News.mc and Monaco-Matin.

Representatives of the office confirmed the probe for the publications, while noting they haven’t yet received an official request for assistance from Poland.

What happened with Zondacrypto?

The saga started early last month, when Polish sites like WP Wiadomości, Wirtualna Polska, and Money.pl revealed that Zonda clients were unable to withdraw their assets.

The news outlets also quoted a research by the market intelligence firm Recoveris, according to which the platform’s crypto reserves had plummeted by 99% in a matter of months.

While rejecting claims his company was on the brink of insolvency, its CEO admitted it didn’t have access to 4,500 BTC worth over $330 million at the time.

Przemysław Kral blamed founder Sylwester Suszek for not handing over the keys to the wallet when he transferred management to a new owner in 2021.

Suszek established the crypto service provider as BitBay in 2014 and sold it in 2021, when it was rebranded to Zondacrypto. He disappeared in early 2022.

While some reports suggest the exchange was acquired by a U.S. investor, an article quoting Polish intelligence recently unveiled it was controlled by the Russian mafia.

Kral himself went missing shortly after his last social media comment on the state of the cryptocurrency firm in mid-April. He is believed to have fled to Israel, of which he is a citizen, too.

Sponsored entities distance themselves from Zonda

While focused mainly on the Polish market, Zondacrypto tried to expand its business and grow its popularity both within the country and beyond, relying on active advertising.

Like in Poland, the exchange became a recognizable name in Monaco through various sponsorship deals in sports, including with the AS Monaco football club, which named a lounge at its Louis II Stadium after the exchange.

It was also the jersey sponsor of the AS Monaco basketball team in the EuroLeague and became the main sponsor of the Top Marques Monaco supercar show. All of these organizations are now removing the toxic partner’s logo, Monaco-Matin noted.

Polish official calls Zonda a pyramid scheme

In its home country, Zondacrypto was accused of backing initiatives and representatives of the opposition to lobby against government-proposed crypto regulation.

A bill drafted by the liberal cabinet of Prime Minister Donald Tusk was vetoed twice by President Karol Nawrocki and stopped in parliament by his nationalist and conservative allies.

Amidst the heated political clash in Warsaw, representatives of the ruling coalition have blamed Zonda’s crash on the lack of proper rules to protect its customers.

Critics have alleged, however, that the Polish legislation is far stricter than the EU’s Markets in Crypto Assets (MiCA) rules it’s supposed to introduce.

Against the backdrop of an ongoing probe for fraud, money laundering and political interference, the country’s Justice Minister Waldemar Żurek commented for the Polsat News channel:

“We certainly need to investigate this for the prohibited lobbying of someone who created a pyramid scheme, the purpose of which was fraud and extortion, not fair investment by our citizens.”

According to Żurek, up to 30,000 Poles may have become victims of the collapse of the exchange, which is believed to have well over a million active users worldwide.

Meanwhile, as reported by Bitcoin[.]pl, the government is preparing to resubmit this week its draft law to the Sejm after adding tougher penalties for people and platforms defrauding crypto investors.

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