Noteworthy Move: GreenBox POS to Acquire Infamous Transact Europe

GreenBox POS, a FinTech firm based in California, focuses on delivering blockchain-driven payment technologies. Listed on Nasdaq under the symbol GBOX since February 2021, the company has achieved a market capitalization nearing $450 million.

In a significant development, GreenBox has announced plans to acquire Transact Europe, a Bulgarian financial services provider that has previously been linked to high-risk activities, particularly its alleged role in facilitating binary options fraud schemes.

Details of the Acquisition

On July 19, 2021, GreenBox POS disclosed that it had signed a binding Memorandum of Understanding (MOU) to acquire Transact Europe Holdings OOD for $30 million in cash.

Context of the Deal:

• In February 2021, GreenBox raised approximately $43 million through its IPO and Nasdaq debut. (press release)

• As of March 2021, the company reported a quarterly loss exceeding $13 million.

• At the time of acquisition, GreenBox had $35.6 million in cash reserves, making the deal financially significant.

More insights on the transaction can be found in a blog post by @borrowed_shorts.

Cybercrime Links: The E&G Bulgaria Scandal

Transact Europe has developed a notorious reputation due to its role in facilitating payment transactions for fraudulent trading platforms linked to Gal Barak and his company E&G Bulgaria.

In September 2020, Barak was found guilty by a court in Vienna and received a multi-year prison sentence for orchestrating investment fraud and laundering illicit funds. Among the brands identified as fraudulent were:

• XtraderFX

• SafeMarkets

• OptionStars

• OptionStarsGlobal

Authorities determined that Transact Europe was actively involved in routing victim payments to these schemes. With new legal actions reportedly underway against Barak’s associates, the criminal investigation into E&G Bulgaria remains ongoing and is expected to widen.

Shadow Leaders: Gery Shalon and Vladislav Smirnov

Among the central figures in the criminal investigation is Gery Shalon, an Israeli citizen indicted in the U.S. in connection with one of the largest cyberattacks in history—the JP Morgan hack.

Shalon also allegedly orchestrated pump-and-dump schemes using penny stocks. According to case files, Shalon was the true architect behind the E&G Bulgaria operation, with Russian suspect Vladislav Smirnov also under scrutiny.

Company Ownership: Who Stands Behind Transact Europe?

Transact Europe EAD functions as a fully owned subsidiary of Transact Europe Holding OOD, with both entities officially registered in Bulgaria.

Major Shareholders Overview:

Falk-Uwe Preussner is a prominent name in the high-risk investment landscape and has been associated with Bet90 Holdings PLC, a company facing allegations related to fraudulent schemes and money laundering.

Meanwhile, Yehuda Avganim and Avi Chesed, both Israeli-born and currently residing in the United States, are behind CardConcept Europe Limited. This entity has ties to the www.processing.com platform, which has frequently been flagged for its alleged role in supporting binary options fraud operations.

Conclusion

The acquisition of Transact Europe by GreenBox POS marks a significant expansion move for the American FinTech firm, but also raises serious questions given Transact Europe’s checkered past in facilitating cybercrime and fraud.

Will this acquisition prove to be a strategic breakthrough or a reputational risk? Time will tell.