The pandemic-era success story of Dominica-based has become the fallen star of 2023 amid the multiple reports of scandals.
Migom Bank’s notoriety is largely due to its hasty acquisitions, lack of communication with key stakeholders, and how it handled the aftermath of its service shutdown earlier this year. Since then, the financial institution has struggled to keep its network running, acquire new capital, and calm frustrated investors and clients.
While several news stories have reported about the bank throughout August and September, many have little to no insight into Migom’s downfall. Fortunately, recent developments have pushed the embattled financial institution’s case forward. The hard work of independent investigators with private backing has led to these breakthroughs, but it doesn’t provide much hope for stakeholders who have been negatively impacted by the bank’s lack of proper service.
The new discoveries have revealed that the mistakes Migom made were fueled primarily by reckless management and a cavalier interest in high-risk investments.
A Backroom Deal That Went Wrong
A group of individuals related to the bank and its holding company approached a private investigator to investigate the real causes behind the financial institution’s struggles. Former Europe and US-based employees were confidentially interviewed, and records of text messages and legal documents were provided to investigators. Based on this information, the likely cause of the bank’s decline is a backroom deal that went wrong.
According to the private investigation, a British-Brazilian investor named Carlos Daniel Filho De Magalhaes allegedly contacted the bank’s executive staff to arrange a personal meeting. Migom’s upper management later learned that Magalhaes had ties to multiple oligarchs across Russia and Africa. The meeting with Magalhaes eventually evolved into a meet-and-greet with supposed American and Brazilian crypto market professionals. One person particularly stands out from this group: Alex Gomes Cordeiro.
Bold Claims From an Alleged Billionaire
Cordeiro was the leader of a group of self-proclaimed crypto and investment gurus. He positioned himself as the world’s largest Bitcoin whale and miner, as well as a self-made billionaire with several university degrees. Cordeiro’s apparent second-in-command Dalila Costa-Leroy made claims about her alleged decades-long career at European banks and on Wall Street, presenting herself as a member of the global banking inner circle. During the meeting, Cordeiro described himself as a founder of the Shiba Inu (SHIB) memecoin and made multiple other dubious claims.
After expressing his passion for Migom, Cordeiro made an offer to the executives to collaborate with the bank as an investor and a client. However, there was a catch. To strike the partnership, Cordeiro requested complete access to Migom’s servers, systems, and wallets with the alleged intention of auditing the company’s security before depositing his wealth. He requested an apartment and expensive tech. These were evidently necessary for him to collaborate with Migom on new projects while managing his alleged global financial empire. Based on the investigation’s findings, the bank’s top management agreed, granting Cordeiro access to Migom’s assets in early April 2023 despite objections from the bank’s financial advisors.
‘Unexpected’ Issues Arise, Cordeiro Disappears
After signing documentation that verified the SHIB deposit, Migom Bank provided Cordeiro the perks he requested, but it didn’t take long for the self-proclaimed billionaire’s promises to go up in smoke. According to Cordeiro, legal issues in Brazil prevented him from fulfilling his obligations to the financial institution. Most concerning was that he disappeared along with the digital assets in Migom’s wallets.
Migom allegedly held a little less than $20 million stablecoins, nearly 100 BTC, and more than 65 ETH. Cordeiro gained access to these funds, which reportedly went missing around the time of Cordeiro’s disappearance. At the same time, Migom President Thomas Schaetti suddenly ceased sending clients frequent emails in which he promised to launch the company’s new operations shortly. The bank later admitted that it had experienced a substantial loss of crypto assets. Instead of detailing anything about this situation, Migom started to hoist blame of embezzlement on former Russian associates and investors.
Probes into Cordeiro’s group uncovered that Costa-Leroy allegedly stole $570,000 from one of the 11 different brokerage companies she had previously worked for. Consequently, the US-based capital market company FINRA had suspended her license.
The Grand Scheme Against Migom
Despite the investigation’s discoveries, there has been no confirmation whether Migom’s alleged collaboration with Cordeiro’s group had actually taken place. Currently, more speculation than facts surround the issue, and many are concerned with the bank’s opaque internal operations.
If the investigators prove to be accurate, and a deal really occurred between Migom and Cordeiro, it raises questions about how the upper management’s ineptitude could have offered an opportunity for the theft of client assets. Although unconfirmed, photographic evidence has been provided which makes at least some of the claims credible.
The current findings only make Migom’s case worse, as the embattled bank remains silent about the cause of the ongoing crisis. Eventually, the truth will surface, potentially exacerbating the damage to the financial institution’s reputation. Ultimately, the newly uncovered information only serves as a cautionary tale for banks and their investors.
