Ibox Bank has lost a legal case against the Ukrainian Gambling and Lottery Regulation Commission (KRAIL) regarding the cancellation of its gambling license. The bank had challenged KRAIL’s decision after a criminal conspiracy was uncovered by the Economic Security Bureau of Ukraine (ESBU).
According to the financial watchdog, over 20 Ibox subsidiaries and multiple gambling operators were involved in a tax evasion scheme. They were accused of accepting “miscoded” payments and bank transfers through unlicensed online casinos and sports betting operators, resulting in a tax evasion of over UAH 400m (€9.80m).
Users topped up their accounts on the sites by depositing cash at self-service terminals. The gaming businesses then credited the funds to their current accounts, even when the numbers didn’t coincide with stated revenue. Ibox was accused of handling UAH 20bn.
KRAIL cancelled Ibox’s gambling licence after carrying out its own probe, but the bank sued, claiming that the decision damaged its reputation. However, the Supreme Court said the regulator’s decision could not cause a loss of reputation since gambling services are not related to its activity as a bank.
Cash was deposited at self-service terminals by users to top up their accounts on the sites. The gaming businesses credited the funds to their current accounts, even when the numbers did not match the stated revenue. Ibox was accused of handling UAH 20bn in this manner.
Following its own investigation, KRAIL cancelled Ibox’s gambling license. The bank then filed a lawsuit claiming that the decision had damaged its reputation. However, the Supreme Court ruled that the regulator’s decision could not result in a loss of reputation since gambling services are not related to the bank’s activities.