Bitsonar Whistleblower Says Law Enforcement Faked His Murder in Attempt to Protect Him

A whistleblower from defunct crypto firm Bitsonar has reappeared after going missing for three days, saying law enforcement faked his kidnapping and death.

AccessTimeIconAug 31, 2020 at 7:10 p.m. UTC
Updated Sep 14, 2021 at 9:50 a.m. UTC

The whistleblower from defunct cryptocurrency firm Bitsonar has reappeared after going missing for three days in Kyiv, Ukraine, saying law enforcement faked his kidnapping – and murder – to foil a genuine attempt on his life.

Yaroslav Shtadchenko went missing last Thursday, with video evidence suggesting he had been abducted. He contacted CoinDesk on Monday afternoon local time, saying that he was safe. He said that the Security Service of Ukraine (SSU) had staged the event after his murder had been ordered. 

SSU reported Monday that it had used such tactics to foil an attempted contract killing, with an agent posing as a hitman to fool the would-be client, though the law enforcement agency did not name anyone involved.

The announcement is the latest bizarre twist in a cautionary tale about crypto investment schemes. Investors in Bitsonar have been trying to recoup millions of dollars worth of digital currency from the platform since February.

"It was not a kidnapping, but a special operation, as it turned out. I didn't know about it," Shtadchenko told CoinDesk. He said he was taken into a minivan on his way home by a group of men, who explained once they were in the car it was an elaborate ruse. (In the video, he appears to be genuinely terrified as men push him into the vehicle.)

His lawyer, Yuriy Demchenko, confirmed his client was safe and that the SSU staged the crime to arrest a man who ordered the killing. The SSU did not share his name, Demchenko said.

Elaborate setup

Shtadchenko’s “kidnapping” occurred just days after he announced he would be contacting law enforcement agencies in different countries to report his allegation that the founder of Bitsonar, Alexander Tovstenko, absconded with some $2.5 million of investor money. Shtadchenko gave interviews, published information about the firm and called for investors to unite and pursue legal action

The SSU issued a press release (warning: link contains disturbing content) on Monday saying it "prevented the contract killing of an IT businessman." The details of the case are consistent with Shtadchenko’s account:

"The officers of the special service established that a resident of Kyiv was looking for a killer to kill a business partner. The client had a conflict with the victim due to joint transactions in a well-known company that dealt with cryptocurrencies and has some features of the so-called Ponzi scheme. The attacker priced the life of the partner at five thousand U.S. dollars.Law enforcement officers imitated the disappearance and then murder of the victim in the Holosiivskyi district of Kyiv, after which they reported his execution.”

The press release contains a photo of Shtadchenko with a simulated bullet hole in his head. The photo was provided to the fake hitman's would-be client in exchange for the second part of the reward, the SSU wrote.

The agency also published a video of agents detaining the man who allegedly ordered the killing. The man's face is blurred in the video, which shows a pile of cash he was about to pay to the “hitman.” The operation took place in Odessa, a seaside resort in Ukraine.

According to Demchenko, staging a killing allows the SSU to charge the suspect with a more serious crime: a completed contract killing instead of an assassination attempt. 

The SSU has done this in the past: in 2018, Russian journalist Arkady Babchenko was reportedly killed in Kyiv, but later the SSU said it staged the shooting and prevented an assasination attempt. 

Bitsonar attracted investors from the U.S., Canada, U.K., Denmark, Norway, Netherland, Finland and other countries, reaching them in part via YouTube influencer videos. In February, the firm froze withdrawals, and on Aug. 6, Bitsonar's website went down.


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