Aide to Former Georgian PM Flees Country Amid Bitcoin Embezzlement Case

A court in Georgia has ordered the imprisonment of Mission Gate founder and venture capitalist George Bachiashvili, who is currently on trial for allegedly embezzling investment profits from former Georgian PM Bidzina Ivanishvili.

Bachiashvili had previously been given bail of 2.5 million GEL ($900,000), but the Georgian Ministry of Internal Affairs reports that the investor had crossed the border into Armenia on March 2, violating the bail’s conditions.

Judge Giorgi Gelashvili has upheld the prosecution’s motion to hold Bachiashvili in custody as a result, saying that the bail violation justifies a more stringent detention measure.

According to Georgian television channel TV Pirveli, Bachiashvili has now entered a third country, with the entrepreneur declining to tell Reuters his current location.

He’s accused of embezzling 8,253.13 BTC between 2015 and 2017, having invested a $5 million loan—secured using Ivanishvili’s personal funds—into Bitcoin mining operations via Bitfury.

Ivanishvili claims that he and Bachiashvili had agreed to liquidate the mined Bitcoin in the second half of 2016, following a discussion about the stability of the cryptocurrency market.

Bachiashvili repaid the loan to the issuer—the Ivanishvili-owned Cartu Bank—in August and September of 2016, and then roughly a year later, transferred $536,900 in profits to the bank’s director, Nato Khaindrava.

Yet Ivanisvili alleges that Bachiashvili had misled him as to the mining operation’s true returns, and that the Bitcoin it had mined had been worth millions of dollars.

As a result, Bachiashvili was charged under Articles 182 and 194 of the Georgian Criminal Code, which prohibit misappropriation of another’s property and money laundering.

Bachiashvili had once been an aide to Ivanishvili, who has an estimated fortune of $7.6 billion, or a quarter of Georgia’s GDP.

Ivanishvili has been described as the “real ruler” of the country by Transparency International, having founded the ruling Georgian Dream party in 2012 and currently serving as its “honorary chairman.”

Transparency International has also argued that the case against Bachiashvili “clearly and explicitly reflect[s] Ivanishvili’s private financial interests,” and that the “weakness of the prosecution’s position and the lack of evidence in this case are so evident that, in any legal system based on the rule of law, such charges would not only be inconceivable but would never even reach court proceeding.”

Writing in the same report on the case, the NGO notes Bachiashvili’s position, which is that Ivanishvili simply advised him on obtaining a loan from Cartu Bank, with Bachiashvili then investing the loan into Bitcoin mining.

The only non-testimonial evidence in the case comprises documents related to the loan, and a recording of a telephone discussion regarding the same loan, in which Ivanishvili advises Bachiashvili to overcome the bank’s doubts by offering to pay a higher rate of interest.

As such, Transparency International concludes that the charges against Bachiashvili are “devoid of both legal and factual grounds,” a view shared by the investor’s legal representatives, the London- and Washington D.C.-based Amsterdam & Partners.

Speaking on the occasion of the case’s first hearing in March 2024, Senior Partner Robert Amsterdam described the case as “a travesty” of due process.

“The State appears to be acting in violation of the law at the behest of the capricious wishes of Ivanishvili,” he said. “It’s not credible for Ivanishvili to claim he’s owed money from an eight-year-old repaid bank loan with no evidence, and then to have the matter pursued with criminal charges instead of a civil case.”

Bachiashvili would face up to 12 years in prison if found guilty.

He has said that the charges are intended as punishment for publicly supporting Ukraine in its ongoing conflict with Russia, something which he believes has displeased the pro-Russian Ivanishvili.

Edited by Andrew Hayward