Sucked into the Venom Vortex

This is part two of Whale Hunting’s deep dive into Venom Foundation — a blockchain company backed by the private investment office of Sheikh Mohammed bin Maktoum bin Juma Al Maktoum. Despite its royal connections, the foundation lacks transparency in almost all aspects, right down to its shadowy origin story involving a mysterious Russian businessman, Alibek Issaev. Read part one here: Snakes and Sheikhs.

Shahal Khan is a Miami businessman with investments around the world. He’s been a partner at a Turkish merchant bank, founded a NASDAQ-listed “blank check” corporation, got an economics institute named after him at American University, and even made a genuine offer to purchase Manhattan’s historic Plaza Hotel for $600 million. Business-wise, he’s seen it all.

At the start of 2022, Khan was getting interested in the “tokenization of assets” — a process by which traditional, real-world assets are converted into digital tokens that can be sold and traded. In his words, he believed in the possibility of a kind of “financial revolution” if hard assets could be tokenized globally. But getting such a venture off the ground demands tedious compliance work. So, Khan thought he’d take a shortcut. He wanted to buy an exchange that was already licensed.

That’s where Venom came in. In October 2022, Venom Foundation became the first registered crypto firm with a license to operate a blockchain and issue tokens in the ADGM, a financial center and free zone in Abu Dhabi. Venom had its own exchange, too. Khan was intrigued.

“What I was very interested in is actually buying that exchange and making it into a proper, legitimate kind of tokenized exchange where you could put hard assets, like mines,” he told Whale Hunting. “I've got investments in that area.”

So Khan made some calls, and a meeting was set up in early 2022. He was going to meet the team behind Venom — maybe to invest, or maybe to acquire the entire firm and its license. He flew out to the UAE.

During this trip, Khan said he was introduced to a man named Alibek Issaev, a Russian businessman who was the “mastermind” behind Venom Foundation. “The whole Alibek thing was so murky,” Khan said. “Nobody really could identify where this guy came from, who were the real investors.”

Khan would later introduce Peter Knez to the team. An investment banker who was once a senior executive at BlackRock but had quit finance a few years after the 2008 financial crisis to open his own winery. Knez had recently decided he wanted to get back in the game, founded his own venture capital firm, and taken on board positions at a number of startups. He, too, was interested in what Venom had to offer.

“I really felt like the Wild West regime was ending in blockchain and crypto, and the institutional regime was starting,” Knez told Whale Hunting. “I just wanted to get smarter about the technology and really understand it.”

They went on to have a few more meetings. According to Khan, they even visited Issaev’s home and took a ride on a Venom-branded speedboat together. Eventually, though, it became clear to Khan that neither Venom or its license were for sale. While he stayed in touch with the team after that, Khan said any potential for a business relationship ended there.

So, he was surprised when, that October, the company issued a press release with his photo at the top. The release, published by Gulf News and several other outlets, was titled: Venom Foundation to build an infinitely scalable blockchain platform. According to the article, Khan was a “strategic investor” in Venom Foundation. Except he wasn’t.

“I was like, what the hell is this?” Khan said. He immediately contacted them. “Why did you put my name in the media when I had nothing to do with it?” He asked for the article to be retracted, but it was a syndicated press release – it had been sent out to thousands of outlets around the world.

Meanwhile, due diligence research Khan had requested on Venom and its ownership was being returned. The reports were clear: Don’t touch it.

“It was just very murky, the source of his [Issaev’s] funds. Nobody understood where it came from,” Khan said. “And there was, when you dig in a little deeper of course, his sources in Russia and all kinds of nasty stuff.” 

“As soon as I heard that, I said, ‘I don't want to buy this exchange. I don't want anything to do with these people.’”

Khan had decided to stay away from Venom. Peter Knez, on the other hand, had decided he was all in, and agreed to become Venom’s chairman — despite Khan’s warnings about Issaev’s less-than-spotless reputation.

“I wanted Peter to analyze it with his BlackRock mind, but he got sucked into the Venom vortex,” Khan said. 

Knez left Venom in December 2023, shortly before the company ceased operations in the ADGM and was re-established in the Cayman Islands. But he doesn't regret his stint as its chair.

“I really became chairman of that foundation ultimately to hang out with the technology people that would teach me about blockchain,” Knez told Whale Hunting. “I kind of felt like [Issaev] had the support of the powers-that-be in Abu Dhabi ... I could have done more homework, but it was serving my purpose.”

The Man from Dagestan

So, who is Alibek Issaev? It was a search that dragged our reporting down a black hole. We found the basics: Issaev is Russian, hailing from Dagestan, a republic of Russia to the east of the Caspian Sea. He’s lived in the UAE for at least two decades.