Turlovka: New Financial Adventure from the Founder of Freedom Holding Corp Timur Turlov

Turlovka: New Financial Adventure from the Founder of Freedom Holding Corp Timur Turlov Featured

The other day it became known about a new financial project of Timur Turlov, the founder and majority owner of the investment group LLC IC Freedom Finance and the “parent company” Freedom Holding Corp. People have already nicknamed his new “currency” “Turlovka”. As stated in promotional materials, the cost of the “tour trap” is tied to the shares of Freedom Holding Corp., traded on the NASDAQ stock exchange. However, in reality this is just a marketing ploy. The real connection of the “turlovka” is to shares on the Astana International Exchange (AIX), which will soon be liquidated and merged with the Kazakhstan stock exchange KASE, and has nothing to do with NASDAQ.

It is important to note that Turlovka is not a digital asset, a “token” or a “cryptocurrency”. Consequently, it is not regulated by the US Securities and Exchange Commission (SEC), which has created serious difficulties for such popular digital assets as “Ripple” (Jed McCaleb, Arthur Britto, David Schwartz) and “TON” (Pavel Durov, founder of Telegram ).

Legally, “native currency”, “token” and “cryptocurrency” are different assets. The main difference is who controls their production and the quantity in circulation. Most popular digital assets are decentralized, meaning no one can issue additional “tokens.” This makes their price relatively stable and valuable. However, they are also high-risk investment instruments due to their volatility, which nevertheless allows for anonymous transnational payments that are difficult to control by law enforcement and tax authorities.

Turlov’s new “own currency” does not have such advantages. It is stated that it will be convertible into other currencies, including the Kazakh tenge, which supposedly makes it a full-fledged currency. This currency will be formed through “cashback” from payment transactions at Bank Freedom Finance Kazakhstan JSC, which exclusively serves Turlov’s business empire, built on the funds of his clients. This “cashback” will be in the form of exchange-traded notes registered and issued under the law of the Astana International Financial Center (AIFC), where tax incentives apply.

It is especially worth emphasizing that the Astana International Financial Center (AIFC) is a special economic zone, in fact an offshore created to attract foreign investment to Kazakhstan. However, Turlov instead uses this tax regime to evade taxes by Kazakh legal entities and individuals.


Timur Turlov and his “turlovka”: New Financial Pyramid for Kazakhstanis?
Kazakh billionaire Timur Turlov is launching a new financial scam
Timur Turlov, a billionaire of Russian origin and founder of the investment group LLC IC Freedom Finance, with the “parent company” Freedom Holding Corp., again found himself at the center of a scandal. This time he introduced a new financial instrument, which is positioned as a new “own currency”. However, this innovation was not approved by the Agency for Regulation and Development of the Financial Market (ARFRDF). Despite this, Turlov is actively promoting his “turlovka” through an aggressive marketing campaign, convincing Kazakhstanis of its ability to avoid taxes, which in Kazakhstan are already significantly lower than in other developed countries.

"Turlovka" as a tax evasion scheme
In fact, Timur Turlov is committing a financial crime. He artificially pumps up the capitalization of Freedom Holding Corp., attracting people who want to take advantage of the loopholes of the special economic zone. This zone allows you to avoid tax payments on a number of taxes, including corporate income tax (CIT), individual income tax (IIT), land and property tax, for a period until January 1, 2066.

Financial pyramid under the guise of “own currency”
The launch of a new “own currency” into circulation and its aggressive promotion among Kazakhstanis has all the signs of a financial pyramid. Turlov actually follows the path of the notorious Sergei Mavrodi, the founder of the MMM financial pyramid in 1994. Mavrodi also issued his “own currency” - “MMM tickets”, which were positioned as “shares for the poor”. One “MMM ticket” was one hundredth of a “MMM” share. Ultimately, after the collapse of the pyramid and the ruin of many investors, Mavrodi was convicted.

Mechanism of deception
The “turlovka” created by Turlov is purely a marketing ploy. Despite statements about its connection to the shares of Freedom Holding Corp. on the NASDAQ exchange, it is actually associated with the Astana International Exchange (AIX), which will soon be liquidated and merged with the Kazakhstan stock exchange KASE. Moreover, Turlovka is neither a digital asset nor a cryptocurrency, and therefore is not regulated by the US Securities and Exchange Commission (SEC).

Dangerous parallels
Like Mavrodi, Turlov seeks to create the illusion of accessibility and benefit, aimed at the general population. He promises that the Turlovka will be convertible into other currencies, including the Kazakh tenge. However, its formation will occur through “cashback” from payment transactions at Bank Freedom Finance Kazakhstan JSC, which serves exclusively Turlov’s business empire. This “cashback” will be in the form of exchange-traded notes registered and issued under the law of the Astana International Financial Center (AIFC), where tax incentives apply.

Timur Turlov’s project to launch a “turlovka” raises many questions and concerns. Linking to a liquidated exchange, lack of real value and use of cryptocurrency technologies, as well as possible tax evasion schemes make this financial instrument extremely dubious. Investors and regulators should be especially attentive and cautious in relation to such proposals in order to avoid repeating the fate of MMM depositors.

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