War sanctions imposed on XNT sister company for Russia links, days before court overturned €250k FIAU fine

Just days before a Maltese court’s decision to overturn a €244,000 fine imposed by Malta’s financial services watchdog against XNT over breaches of anti-money laundering (AML) laws, sanctions had been imposed on its Cypriot sister company over connections to a privately owned Russian international investment group.

MaltaToday reported the July 13 decision handed down by the First Hall of the Civil Court in its Constitutional jurisdiction in the case filed by the financial services and investment services provider XNT, formerly known as Exante, which the FIAU had served with a €244,679 fine over a number of failures to comply with the Prevention of Money Laundering Act and the Prevention of Money Laundering and Funding of Terrorism Regulations.

But just a few days before, on July 5, Ukraine’s President Zelensky brought into effect a package of  National Security and Defense Council (NSDC) sanctions, focusing on entities linked to the Russian Alfa Group, including Exante Group Company, registered in Cyprus as EXT Ltd.

The sanctions were imposed on entities which either created threats or posed potential threats to Ukraine’s national interests, national security, sovereignty and territorial integrity, promote terrorist activities or violate human rights and freedoms and the citizen.

Exante provided brokerage services for investments in foreign assets and held a significant position in this market, ranking as the second largest market player in Ukraine.

It had been one of the few international intermediaries that worked with Ukrainians after 2014, allowing them to invest in foreign assets, according to America-based business publication Forbes. 

In 2015, a complaint had been filed by the United States Securities and Exchange Commission (SEC), naming Portomaso-registered Exante as one of 37 companies that had used insider information obtained by cybercriminals to buy and sell securities in anticipation of market responses to the stolen information, netting the group over $100 million in profits.

“Exante Ltd purports to be a Malta-based hedge fund and holds proprietary trading accounts at Interactive Brokers and at Lek Securities, which were used in connection with the fraudulent scheme to make trades resulting in approximately $24.5 million in ill-gotten gains,” reads the SEC complaint, going on to say that “several of Exante's directors are also owners of defendant Global Hedge Capital Fund Ltd., and the two entities share employees. Exante and Global Hedge frequently made illicit trades in the same securities, on the same days and around the same time, and often through the same IP addresses.”

In March last year, financial intelligence website FinTelegram reported the fine imposed by the FIAU on the MFSA-regulated XNT, owned by the Malta-registered Lartemisis Holding Ltd, a holding company controlled by the three British Virgin Island firms, Nations Development Group Ltd, Stoic Ltd, and Zormax Ltd and part of the Russian-Maltese Exante Group, which also includes EXT Ltd.

Exante and EXT Ltd were also blacklisted by the Russian Central Bank in 2021.