Despite being the subject of multiple news stories throughout August and September, there has been little insight into the decline of Migom Bank.
The neobank once hailed as a rising star out of Dominica now finds itself under the industry's watchful eye. Its journey from a hopeful endeavor to a notorious figure has been marked by hasty acquisitions and a stunning inability to connect with its investors, clients, and users. This turbulent transformation took place in the aftermath of a service shutdown in early 2023, and the bank's struggle to mend its correspondent network, secure fresh capital, and appease inquisitive clients remains ongoing.
Recent developments, spearheaded by independent investigators with private backing, have unveiled fresh insights into Migom's internal decision-making. Unfortunately, for those holding out hope for a miraculous turnaround, this newfound information only highlights a pattern of ineptitude, recklessness, and a brazen attitude toward high-stakes investments.
A Meeting with New Investors
We have learned that recently a private investigator was engaged by a group of individuals related to the bank and its holding company to glean information about the real causes of the problems likely concealed by the management. Among other things a number of bank's employees in Europe and the USA were interviewed confidentially. Based on the records of text messages and the photographic evidence of legal documents provided by them, it appears that a backroom deal went wrong.
During the later days of the bank’s success, Migom’s executive staff were allegedly approached by controversial British-Brazilian investor Carlos Daniel Filho De Magalhaes, who they would later learn had ties to several African and Russian oligarchs. At the time, such interest intrigued the bank’s upper management to the point that they were willing to have personal meetings with him. One such meeting evolved into a proposed meet-and-greet with several Brazilian and American crypto players, of whom one in particular stands out: Alex Gomes Cordeiro.
Wild Claims Draw Moths to the Flame
Cordeiro led a group of self-proclaimed crypto and investment masters, including Dalila Costa-Leroy, who claimed she had a decades-long career on Wall Street and with European banks. While Costa-Leroy flaunted her business acumen and presented herself as a member of the global banking inner circle, Cordeiro positioned himself as a self-made billionaire with several university degrees, and both the world’s biggest Bitcoin whale and miner. He made several other improbable claims during the meeting with Migom, including asserting himself as a founder of the well-known Shiba Inu (SHIB) cryptocurrency.
As Cordeiro claimed to hold Migom Bank in high regard, he was offering to associate with them as a client and investor. As a part of the preparation for this collaboration, he requested full access to Migom's systems, servers, and wallets to audit their security and safety in preparation for the deposits of his huge wealth. He also requested perks in the form of an apartment and expensive tech as he wanted to manage his proclaimed global financial empire unimpeded while working on all the new projects with Migom Bank. Cordeiro and his associates completely hypnotized Migom's management, and despite objections from the Migom's advisors, access was granted in early April of 2023.
Hook, Line, and Stinker
Migom bit, signed documentation verifying the deposit of the SHIB, and began to provide Cordeiro with his requested perks. It was not long before the investors’ promises began to fall through. Cordeiro started to complain about legal issues in Brazil that were preventing him from following through on his obligations. He eventually disappeared, along with the Migom logs he had accessed and Migom’s stored cryptocurrency.
Migom was allegedly holding nearly 20 million stablecoins, almost 100 BTC, and over 65 ETH in their cold wallets, the safety and redundancy of which Cordeiro was allowed to inspect. Around the time of his departure, these funds allegedly went missing, while frequent emails from Migom President Thomas Schaetti to bank clients promising that operations would be up and running in a matter of weeks, suddenly ceased. Migom later mentioned that they had experienced a significant crypto loss, followed by seemingly baseless claims about embezzlement from former investors and Russian associates.
To complicate matters further, investigations into the other investors revealed that Cordeiro’s number 2, Costa-Leroy, had worked for 11 different brokerage companies, from one of which she allegedly stole $570,000. As a result, her license had also been suspended by the US-based capital market company FINRA.
Beware the Wolf in Investor’s Clothing
Speculation runs wild amidst Migom's conspicuous lack of transparency concerning their internal operations during this crisis. If the alleged collaboration holds any water, it raises alarming questions about potential incompetence that could have allowed the pilfering of client funds and cryptocurrencies right under Migom's nose. These investigations, though shrouded in uncertainty, have yielded photographic evidence that lends credence to at least some of these claims.
In the grand scheme, this is just another log on the funeral pyre that Migom seems to be stoking for themselves. The truth of these events will eventually surface, and the longer the beleaguered bank maintains its silence, the more its reputation will deteriorate. For now, one can only hope that this fresh information provides Migom's clients with a glimpse into the behind-the-scenes happenings and serves as a cautionary tale for both investors and banking institutions alike.
