Kazakh businessman Yermek Alimov files a lawsuit in the U.K. High Court against the shareholders of Genesis Digital Assets - Exclusive

Kazakh businessman Yermek Alimov files a lawsuit in the U.K. High Court against the shareholders of Genesis Digital Assets

Prominent Kazakh businessman Yermek Alimov has filed a lawsuit against Abdumalik Mirakhmedov, Rashit Makhat and Andrey Kim (collectively known as MMK) and Genesis Digital Assets (GDA) Limited in the High Court of England and Wales. The lawsuit concerns Alimov’s early participation in a major Bitcoin mining project in Kazakhstan, which is currently managed by GDA. GDA, in which MMK hold a stake, is now one of the world’s largest Bitcoin mining companies.

In 2017, as MMK sought to create a Bitcoin enterprise in Kazakhstan, they approached Alimov because of his knowledge of the Kazakh energy sector. Through his connections and expertise, Alimov was able to identify, organise and negotiate the purchase of power stations in the Karaganda region. Not only did he provide electricity at a lower cost than was originally demanded, but he also identified and provided a suitable location for the first Bitcoin mining farm. The power stations provided by Alimov now contribute 100 out of the 280 megawatts of energy needed to run the Bitcoin mine. The reliable and affordable energy supply was a powerful incentive for GDA and its shareholders to expand their activities in Kazakhstan.

Speaking of his early involvement, Alimov noted, «in the early stages of the project’s development, my contribution was integral. The energy supply I organised allowed GDA to launch successfully and profitably and turn into one of the significant players in the crypto mining sector«.

The energy supply spurred the initial success of the Bitcoin project and saw GDA attract high-profile investment, including Anthony Scaramucci’s SkyBridge Capital and Sam Bankman-Freid’s Alameda Research, the sister firm of FTX. These investments allowed GDA to quickly become one of the world’s largest Bitcoin mining ventures, generating over $1 billion in bitcoin to date.

In exchange for his contribution, Alimov was promised 35% of the 50% shares MMK received in the venture, a proportionate share of all bitcoins generated by the mining operation he helped create, and savings resulting from lower electricity prices. However, in October 2018, Alimov stopped receiving payments in bitcoin and was forcefully excluded from the project. In September 2020, Makhat and Kim received their shares in GDA, but Alimov was not given the promised share.

Alimov claims that MMK did not fulfil their obligations to him and refused to formalise the share promised to him in the company. He attempted to reach his former business partners on numerous occasions. However, all attempts to reach an agreement ignored. As a result, Alimov felt he had little choice but to take his case to court.  Alimov’s lawsuit seeks to restore his rightful share in the GDA project and ensure that he receives the share of bitcoins due to him.

Commenting on this, Alimov said: «My role in GDA’s Bitcoin mining projects has been a major factor in the company’s success in Kazakhstan. I firmly believe that my contributions were unfairly ignored, which prompted me to take legal action. I am committed to upholding the principles of fairness and integrity in business, and I am committed to seeking a just resolution to this conflict.»

Alimov is a Kazakh businessman with extensive experience in various sectors of the economy. During the period of participation in the GDA project, he headed Astanaenergoservis JSC, which was the owner of energy facilities supplying the capital of Kazakhstan.

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