Former PM’s lawyer says ex-investment fund head “misled” Ivanishvili in Bitcoin investment, denies political motive behind Prosecutor’s Office charge

Teimuraz Tsikvadze, the lawyer of Bidzina Invanishvili, the founder of Georgia’s Co-Investment Fund and the ruling Georgian Dream party, on Monday said Giorgi Bachiashvili, the former chairman of the Fund who was last week charged by the Prosecutor’s Office of the country for misappropriation of cryptocurrency and money laundering, had “misled” Ivanishvili through Bitcoin investment advice for the Fund between 2015-2016.

Tsikvadze’s statement denied the claim by Bachiashvili’s lawyer Robert Amsterdam, who last week said the initiation of the investigation against Bachiashvili was related to his “pro-Ukraine and pro-Western statements”.

Ivanishvili’s lawyer responded to the “absurd accusation” and said the “fact that my [client] had only business relations with Bachiashvili” made the claim a “completely baseless accusation”.

• Prosecutor's Office charges former Co-Investment Fund head for cryptocurrency misappropriation, money laundering

The statement highlighted the “special trust” established between Ivanishvili and Bachiashvili over the years, and said the latter had enjoyed the “best conditions for personal and professional development” at the Fund.

It also noted Bachiashvili had been employed in organisations owned by Ivanishvili over 13 years, and said he had offered Ivanishvili to invest money in Bitcoin mining and production during the former’s time as the head of the Fund in 2015.

Ivanishvili found the business proposal interesting. At the same time, considering that he fully trusted Bachiashvili, he agreed to his proposal and decided to invest $5 million in Bitcoin mining”, Tsikvadze said, adding the corresponding loan was issued by Cartu Bank, also founded by Ivanishvili, and “fully secured by Ivanishvili's personal funds”.

The lawyer said Bachiashvili later expressed concern about an “unstable situation” in the cryptocurrency market, and “convinced” Ivanishvili to return the investment by selling the earned amount of bitcoins, explaining that the value of the earned currency would only be sufficient for the procedure. 

Ivanishvili, on the one hand, had full confidence in the accused, and on the other hand, knew from the beginning that the project had been extremely risky [...] It was these circumstances that became the basis for Ivanishvili giving the appropriate consent [for the return]”, he added. 

Tsikvadze said Bachiashvili returned $5 million between August-September 2016, and handed over $536,900 to Nato Khaindrava, the General Director of Cartu Bank, approximately one year later. The head of the Fund said the amount was “the money received from the sale of bitcoins generated as a result of the mining after the return of the investment”. 

At the time, no one doubted Bachiashvili's good faith, but later, after there appeared serious grounds for assuming that the funds invested in one of the projects of the Fund were being spent inappropriately, Ivanishvili became interested in studying the issue of bitcoin mining, and it turned out that Bachiashvili had misled the investor and appropriated millions of dollars worth of cryptocurrency”, the statement said.

Tsikvadze added Ivanishvili became suspicious of Bachiashvili's activities after questions arose regarding the Mtkvari hydropower plant project financed by the Fund.

The total investment volume of the project was about $131 million, and the HPP was supposed to be put into operation in 2020. However, in the end, the cost of construction of the project increased by $100 million dollars, to about $235 million, and despite this, the project is still not completed. This is probably due to non-relevant spending, embezzlement or misappropriation of funds intended for investment on the part of the heads of the Fund”, Tsikvadze said.

The lawyer added Ivanishvili had intended to take legal action on the issue surrounding the plant “[e]ven if there had been no apparent [issues] related to the investment in cryptocurrency”.