Sanctioned Russian oligarch secretly held stake in Musk's SpaceX - Bloomberg

Billionaire and senator Kerimov has held a stake in SpaceX through the Heritage Trust, based in Delaware, since 2017, according to four sources, including two former senior US national security officials. Initially, the trust owned 1% of SpaceX.

The SpaceX holding was established a year before Kerimov, and others were sanctioned by the US Treasury Department in 2018 in response to "Russia’s malign activity around the globe."

The Treasury Department’s actions aimed to block his assets and prevent him from conducting business with US companies. Citigroup, which handled the day-to-day administration of Heritage Trust, sought guidance from the Treasury Department and decided there was no need to block the trust and its associated entities after Kerimov was sanctioned, allowing the trust to continue operating, a source said.

Four years later, in June 2022, the US Treasury froze a $1 billion trust, which had been created in 2017 to hold Kerimov’s US assets, after its investigators uncovered a complex web of legal structures and front companies set up to conceal his interests. According to two sources, the stake in SpaceX had already been sold before this Treasury action.

As Bloomberg notes, these events highlight the challenges that complex financial networks pose to U.S. sanctions enforcement and the difficulties faced by companies like SpaceX, which is now valued at approximately $350 billion and is becoming an increasingly powerful player in global defense and communications.

They also raise questions about due diligence at Citigroup, the international banking giant, which is now under investigation by the US Department of Justice over its handling of Heritage Trust.

Musk’s company

Musk, the world’s richest person, became one of Donald Trump’s most influential advisers. He now has email access and office space in the White House, while his social media platform X and SpaceX’s Starlink satellite business have made him an increasingly influential geopolitical player.

Musk has come under scrutiny for his repeated contacts with Moscow, alleged interactions with Vladimir Putin, and his handling of Starlink terminals provided to Ukraine after Russia’s invasion.

The Russian oligarch

According to Bloomberg's Billionaires Index, Kerimov is the 17th richest Russian, ranking 282nd globally with a net worth of approximately $9.9 billion.

A member of Russia’s upper house of parliament, Kerimov built his fortune by buying stakes in Russian companies, particularly in banking, energy, and mining, sometimes using loans from state banks. The European Union imposed sanctions on him in 2022, labeling him a member of Putin’s inner circle of oligarchs.

In April 2018, the US sanctioned Kerimov, freezing his assets and prohibiting transactions with him, as part of the Trump administration’s broad crackdown on Russian officials and oligarchs benefiting from corruption and foreign aggression.

After Russia’s full-scale invasion of Ukraine in February 2022, the US intensified efforts to target the assets of sanctioned Russians. In April 2022, U.S. authorities seized the 100-meter superyacht Amadea in Fiji, which Kerimov controlled through a web of shell companies. Ownership of the $300 million vessel is currently the subject of a case in a Manhattan federal court.

In September 2022, the US Treasury sanctioned the entire Russian Senate, including Kerimov, for approving Putin’s request to send troops into Ukraine and providing justification for the full-scale invasion.

That same year, when the Heritage Trust was blocked, the Treasury Department stated that the trust had been created in 2017 to hold and manage Kerimov’s US assets. SpaceX was valued at over $21 billion in 2017. By December 2024, its $350 billion valuation secured its status as the world’s most valuable startup.