The Prosecutor's Office of Georgia on Thursday charged George Bachiashvili, the former head of the Georgian Co-Investment Fund, for misappropriation of a “large amount” of cryptocurrency and money laundering.
The Office said its investigation had established Bachiashvili had invested in mining of Bitcoin cryptocurrency in the summer of 2015 using money “personally raised” by him and handed over by an investor.
The mining services were provided by a foreign firm to an enterprise owned “in practice” by Bachiashvili under a one-year contract valued at $6.3 million, including a $5 million share by the investor.
The body explained the offender had been in charge of ensuring the technical execution of the investment of the money, with the anticipated profit expected to be divided among the parties in proportion to the invested funds. The bitcoin profit from the investment was to be accumulated on the cryptocurrency wallet of the enterprise under Bachiashvili’s ownership.
The operation generated 24,661.85 bitcoins throughout a year, resulting in the profit of 8,253.13 bitcoins, which were appropriated by the alleged offender in 2017, with only $536,900 paid to the investor as their share of the profit. The amount of appropriated bitcoins equalled over $39 million, the body added.
Bachiashvili then concealed details of the appropriated currency with the aim of transferring the amount to various wallets and using it for financial operations, the Office added, allowing him “free management and use” of the illegal funds.
The alleged offender is facing between nine and 12 years in prison if found guilty, with the Georgian Co-Investment Fund releasing a statement that said the organisation had not been involved in the actions.
It also said the Fund was unable to comment further on the investigation as Bashiashvili served as a member of its supervisory board and had not worked as a director “in years”.