Sanctions loom over Kundnani-linked firms amid Russia war machine and US fraud allegations
Alchemy Markets and Xoala come under scrutiny from financial regulators (photo from open sources)
Despite sweeping Western sanctions, the Russian defense industry continues to find loopholes to conduct shadow financial transactions and purchase components for weapons production. Dubai has emerged as a key hub for these activities, where financial operators have built an established system for laundering capital linked to Russia.
Our analysis examines how this network operates and why its organizers are preparing a large-scale IPO scheme in the United States.
Russian companies and individuals continue to use Dubai-based forex brokers to move capital out of Russia and subsequently legitimize it in Western countries, including the United States. According to available information, this financial route may also be used by entities linked to the Russian Federation's military-industrial complex to pay for imported components and technologies needed for weapons production.
In particular, the EU 21st sanctions package, which took effect on July 23, 2026, significantly restricted Russia's financial sector. A total of 94 banks and financial institutions were subjected to asset freezes and business restrictions. Full transaction bans were imposed on 33 credit institutions and 14 cryptocurrency platforms.
However, one unintended consequence of the tougher restrictions has been a sharp increase in demand for alternative payment routes out of Russia.
Amid this, businessman Nicky Gope Kundnani has drawn renewed attention. His activities have previously been the subject of investigations by international media outlets and scrutiny from financial regulators over compliance with anti-money laundering laws.
Drawing on his experience in establishing offshore structures, Kundnani has been linked to providing services to Russian clients through the Dubai-based broker Alchemy Markets DMCC, where he is considered the company's ultimate beneficial owner and manager.
The reported client servicing scheme consists of five main steps:
- Partners help a client register a legal entity in Dubai
- The newly established company is integrated into the ecosystem as a client of Alchemy Markets DMCC
- The broker accepts cryptocurrency from the client
- Using forex instruments, the digital assets are converted into fiat currency while changing the apparent origin of the funds
- At the final stage, the money is transferred through the Xoala payment system (legally represented by the Swedish company Steven AB). Previously, these payment functions were handled by Blackthorn Finance Ltd.
As Russia's war against Ukraine continues, disrupting financial infrastructure of this kind is becoming increasingly important, particularly given the risk that it may be used by entities linked to the Russian defense industry.
On November 17, 2023, the UK Financial Conduct Authority (FCA) restricted Blackthorn's operations and ordered its assets frozen. In August 2024, Blackthorn entered voluntary liquidation after initially declaring itself solvent. However, the liquidators later concluded that the company's assets were insufficient to satisfy all creditor claims. As a result, on April 14, 2025, Blackthorn was placed into special administration.
Clients whose funds were frozen comprised citizens of 13 countries, including Ukraine. In February 2026, they staged a public protest at the iFX EXPO Dubai international exhibition, where Nicky Kundnani presented the new Xoala payment brand as an alternative to Blackthorn. Protesters demanded the return of their frozen assets, an investigation into Blackthorn's financial transactions, and a legal assessment of the actions of those involved in managing the company.
Alongside operations allegedly linked to servicing sanctioned capital, structures associated with Nicky Kundnani are preparing FDCTech, Inc. for a listing on the NASDAQ stock exchange.
The choice of audit firms involved in the process has also attracted attention. The current auditor for the company is Nigerian firm LAO Professionals, based in Ikorodu, Lagos State. It was previously audited by Olayinka Oyebola & Co, another Nigerian accounting firm.
The latter previously became the subject of enforcement action by the US Securities and Exchange Commission (SEC) in connection with concealing fraud at Tingo. As a result, it received a six-year ban on auditing public companies in the United States. LAO Professionals, in turn, signed off on FDCTech's financial statements, after which the company, at the SEC's request, restated financial results for several reporting periods and approved the balance sheet of CS Diagnostics, which included an intangible asset valued at $499.4 million that was later written off in full.
Official filings and regulatory findings described these episodes as "extensive financial restatements" and "material control weaknesses." The repeated use of auditors with such a track record has raised questions among market participants about the independence of the audit process and the accuracy of the company's financial statements ahead of its planned IPO.
The formation of FDCTech took several years through the consolidation of assets previously affiliated with Kundnani. That consolidation was preceded by corporate restructuring, including bankruptcy proceedings and rebranding. For example, NSFX Ltd changed its name to Alchemy Markets Ltd, coinciding with regulatory actions and fines imposed on the previous brand.
Ukraine's National Securities and Stock Market Commission (NSSMC) has issued an official assessment of the group of companies associated with Kundnani. In particular, broker NSFX, later renamed Alchemy Markets, and related resources were added to the regulator's list of suspicious investment projects that pose a high risk of investors losing all of their money.
In June 2026, FDCTech's board of directors, chaired by Nicky Kundnani, officially acknowledged that the company's previously published financial statements for the years 2024 and 2025, as well as for several quarters of 2025 and 2026, should no longer be relied upon by investors.
Following the revisions, the value of assets at the end of 2024 was reduced by approximately $8.1 million, while assets reported for June 2025 were lowered by nearly $15.9 million compared with the original financial statements.
The company also formally acknowledged material weaknesses in its internal financial controls, which had been audited by the Nigerian firms Olayinka Oyebola & Co and LAO Professionals.
According to financial analysts and market participants, actions such as repeatedly restating financial statements to reflect multi-million-dollar declines, inflating asset values before a public listing, and engaging auditors with compromised reputations exhibit characteristics commonly associated with financial manipulation and pose risks of market distortion, particularly pump-and-dump schemes.
Since 2024, the National Securities and Stock Market Commission of Ukraine has repeatedly warned about the risks of dealing with entities associated with Kundnani. Broker NSFX Ltd was added to the regulator's list of suspicious investment projects as early as May 2024.
In February, March, and May 2026, the Ukrainian regulator separately warned of the high risks associated with Blackthorn Finance Ltd, Alchemy Markets Ltd, and the new payment brand Xoala. Despite these public warnings, private investors have continued to report frozen accounts and financial losses on these platforms.
However, the issue extends far beyond protecting private investors. The potential servicing of Russian capital and conducting transactions on behalf of companies linked to Russia's defense industry elevates the activities of this group into the realm of national security.
Using financial infrastructure of this kind to process payments for the Russian Federation's military-industrial complex effectively turns its organizers from participants in questionable financial schemes into facilitators of the logistical and financial support underpinning Russia's aggression against Ukraine.
It appears both logical and justified under these circumstances to consider adding Nicky Kundnani and his key affiliated entities to the personal sanctions lists of Ukraine and its partner countries, to freeze their assets, cut off access to the international financial system, and disrupt channels of indirect financing for Russia's military aggression.
