Overview
LottoPalace, an online lottery platform associated with Uwe Lenhoff’s network, is facing allegations of financial misconduct, including the use of cryptocurrency transactions that may have facilitated money laundering.
Customer Grievances and Financial Irregularities
Numerous customers have reported issues with LottoPalace, including:
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Unprocessed withdrawal requests
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Unauthorized debits from their bank accounts
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Significant account balances, sometimes exceeding €100,000, remaining inaccessible
These complaints suggest potential financial mismanagement within the platform.
Involvement of Coinbase’s CB Payments Ltd
Investigations have revealed that some LottoPalace customers were instructed to transfer funds to accounts held by CB Payments Ltd at Estonia’s LHV Pank. CB Payments Ltd is a subsidiary of Coinbase Global Inc. (https://www.coinbase.com/), a major U.S.-based cryptocurrency exchange.
The process appeared as follows:
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Customers deposited fiat currency into CB Payments Ltd accounts.
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These funds were allegedly converted into cryptocurrencies.
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The cryptocurrencies were then transferred to other wallets or exchanges.
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Finally, the funds were converted back into fiat currency and deposited into accounts controlled by different entities.
This sequence effectively obscures the origin of the funds, raising concerns about potential money laundering activities.
Regulatory Actions and Concerns
CB Payments Ltd (source) has faced regulatory scrutiny. The UK’s Financial Conduct Authority (FCA) fined the company £3.5 million for providing services to over 13,000 high-risk customers, including those on sanctions lists and politically exposed persons. These breaches facilitated transactions totaling approximately $226 million, increasing the risk of money laundering.
The FCA’s action marks its first enforcement against a firm enabling cryptocurrency trading under the 2011 electronic money regulations.
LottoPalace’s Operational Structure
LottoPalace is operated by Altair Entertainment N.V. and Payific Ltd, both linked to Uwe Lenhoff. The platform has primarily targeted German-speaking markets, offering bets on various lotteries. Despite its operations, LottoPalace has received warnings from multiple financial regulators for unauthorized investment services.
Financial Disputes Within the Network
Veltyco Group, a company associated with Lenhoff, has reported that Altair Entertainment owes it €1.6 million from lottery operations. In total, Lenhoff’s network allegedly owes Veltyco €10.9 million. Veltyco has announced intentions to pursue legal action to recover these debts.
Conclusion
The intertwining of LottoPalace’s operations with cryptocurrency transactions through CB Payments Ltd raises significant concerns about financial transparency and regulatory compliance. The platform’s alleged practices highlight the challenges regulators face in monitoring and controlling financial activities in the digital age.
For more detailed information, refer to the original reports and regulatory notices.