Wedding’s alleged money man detailed own accounts in lawsuit

“I can’t use my account that has millions of dollars in it,” he wrote. He demanded a response.

The next day, KuCoin told him his account had been temporarily frozen. Police in India had issued a freeze on more than $500,000 (U.S.) they’d linked to a reported scam.

“Is this some kind of joke?” Sokolovski wrote back. “Please understand how stressful this is for me right now, I have so much money on the site and I’m worried now.”

He had good reason to be.

At that moment, Sokolovski was a key figure in what a new U.S. federal indictment says was an elaborate money laundering scheme. As the FBI tells it, here was the Toronto money man behind Canadian ex-Olympian turned wanted drug kingpin Ryan Wedding; all that summer, police in the U.S. and Canada were methodically building their case.

Cryptocurrencies have become increasingly popular for criminal activity for good reason. Crypto assets such as bitcoin or tether offer a promise of anonymity — a way to make it more difficult for skilled investigators to unravel, for example, the true identities of the people moving millions for a murderous international drug empire. 

That is, unless the target of the investigation willingly lays out his alleged money laundering network in a public lawsuit filed earlier this year in Ontario court.

Last week, Sokolovski was arrested in Canada on U.S. charges of laundering money — via bulk cash, cryptocurrency and wire transfers — for several members of Wedding’s financial network, and for repeatedly procuring or buying jewelry and luxury vehicles for Wedding and his associates. Among the allegations is the charge that he made a bejewelled necklace for one of Wedding’s sicarios as a reward for his role in the assassination of the FBI’s key inside man.

Sokolovski is now facing extradition in a Toronto court. It is not yet clear what his arrest means for his ongoing lawsuit against the companies behind KuCoin.

The allegations contained in this story have not yet been tested in court. 

Sokolovski’s lawyer, Scott Fenton, declined to comment, saying: “We don’t intend to discuss the case in the media while the matter is before the courts.”

It’s not clear exactly how the 37-year-old Sokolovski allegedly became one of the “chief money launderers” in a narcotics scheme U.S. authorities say rivals those of Joaquín (El Chapo) Guzmán or Pablo Escobar.

In court documents, Sokolovski is listed as a Canadian who was born in Lithuania. His address is recorded in Maple, while his business in loose diamonds and luxury jewelry — Diamond Tsar — has Ontario corporate records that trace back to a postal box in Thornhill. Following his arrest last week, U.S. authorities said he operated a downtown Toronto storefront, but he didn’t — the address is an unoccupied office on Victoria Street. “Diamond Tsar does not have a retail presence and therefore we avoid excessive commercial costs,” the company’s now-defunct website explained.

The warrant for his arrest was executed at a condo in the Fashion District. When a Star reporter visited his penthouse apartment, the door was dented, with damage visible around the handle. A woman who answered denied that Sokolovski lived there. A resident of the building, who identified Sokolovski by photo, said he’d lived in the unit for roughly three years.

Other traces are scarce, save for a modest professional poker profile — his best result was winning $10,751 (U.S.) in a 2015 World Series of Poker tournament.

By August 2024, Sokolovski was regularly moving large amounts of money via the cryptocurrency “wallets” he managed with KuCoin, frequently receiving or sending transactions worth hundreds of thousands of dollars in tether, or USDT — a “stablecoin” that is pegged one-to-one with the U.S. dollar.

The Wedding drug organization would “break large amounts of money into smaller transfers” and “quickly use intermediary USDT wallets to move funds before ultimately reaching a hub tether wallet controlled by defendant Wedding,” U.S. authorities said in documents that allege a spiderweb of connected accounts.

Think of it like a game of hot potato, except the potato is tens of millions of dollars made from the sale of cocaine bricks in Canada, dollars that then have to be used to pay cocaine producers in Colombia and cartel bosses in Mexico.

Between September 2023 and May 2024, U.S. authorities allege Sokolovski received the equivalent of $20 million from a tether wallet “controlled by a member of the conspiracy.” Then, from May up to and including the day before his account was frozen, he allegedly received $8 million from a different tether wallet also linked to the conspiracy.

Still, when KuCoin froze his account, Sokolovski’s lawsuit reveals that he couldn’t make sense of why. “I don’t understand what the issue is all of a sudden,” Sokolovski wrote in one of a long series of indignant messages. “I’m really stressing out … Can someone please tell me what’s going on?”

Indian police, KuCoin claimed, had flagged his account over three transactions. Two of them involved tens of thousands in tether, sent by the second wallet U.S. authorities linked to Wedding. Sokolovski should get in touch directly with the police in India, the customer service rep told him.

“This has to be some kind of error here,” Sokolovski wrote. “What does my account have to do with Indian police?”

On the one hand, cryptocurrencies offer enticing secrecy. Transactions are not recorded between the names of businesses and people; instead, crypto assets move between wallets known only by long strings of numbers and letters.

On the other hand, crypto has a unique kind of public accountability. Every single transaction is recorded on the blockchain, a kind of ledger that anyone can see.

For investigators, the trick is: If you link a real person to an anonymous wallet ID, you can pull up the blockchain and see every transaction they have ever made.

Likewise, the Star has been able to verify much of the flow of assets in and out of Sokolovski’s many crypto wallets, which were listed by U.S. authorities last week and are outlined by Sokolovski himself in his lawsuit against KuCoin.

Sokolovski ultimately sued because his KuCoin account was frozen a second time, in January of this year, only a few days before the assassination of the FBI’s co-operating witness, Jonathan Acebedo Garcia.

According to Sokolovski, he sold a Richard Mille watch to a “reputable international watch and diamond dealer” he’d dealt with “on numerous occasions” in the past. The customer paid three bitcoins, a sum worth more than $300,000. 

But Sokolovski couldn’t withdraw the money. “You told me this would not happen to me again,” he told KuCoin customer service. “I’m in shock this is happening again.”

Once again, he was told the freeze was at the behest of Indian police; in his messages, laid out in his lawsuit, Sokolovski grows more and more agitated.

“I’ve been a customer on this site for so many years and all of a sudden I’m being told I did something wrong?” he wrote on Jan. 25. “If I did something wrong why would I keep 100s of thousands on your site at all times, nothing about this makes any sense.”

Sokolovski eventually received an email purporting to be from an Indian police investigator: His account had received stolen funds from a set of crypto wallets police had linked to a cryptocurrency theft worth $2.5 million. 

Sokolovski didn’t buy it. For his lawsuit, he hired an expert to trace nearly 140 separate transfers from one of the suspicious wallets into his account. In Sokolovski’s version, the expert’s report lays out how this wallet couldn’t possibly be the source of the three bitcoins. That was a legitimate sale, Sokolovski insisted.

Nevertheless, it was the same wallet that U.S. authorities allege laundered $20 million for Wedding through Sokolovski; his lawsuit lays out a matching set of transactions in a tidy spreadsheet.

In September 2024, Sokolovski and fellow Canadian Andrew Clark, Wedding’s alleged right-hand man, allegedly began texting via the encrypted messaging app Threema. The conversations were allegedly recovered from Clark’s phone after his arrest, and are outlined in documents filed for Sokolovski’s Canadian extradition. They have not been tested in court.

In them, Sokolovski presents himself as a reliable partner to Clark on all things money. At one point, he advises Clark not to use a rival set of middlemen to exchange funds. They charge “crazy rates,” Sokolovski writes, referring to himself as “your friend and Jew advisor.”

The next month, Clark comes to Sokolovski with a complaint. He’s “deeply concerned” about a bank transfer Sokolovski had done for him. “Of that guy I tried to kill,” Clark writes — “police intervened.”

“Wtf why?” Sokolovski responds.

Clark: “Well I tried to kill him lol.”

No one has asked about that transfer, Sokolovski writes.

“But cops are on the case!” 

Clark presses: Was that account under Sokolovski’s name? 

It was registered under his company name, which is listed under his real name, Sokolovski writes. But: “If they wanted to ask me anything I think they would of by now.”

Just three days later, on Oct. 7, 2024, Sokolovski advises Clark that his cryptocurrency wallet had been blacklisted by the company that issues tether.

Change the wallets as soon as possible, Clark tells Sokolovski, who agrees to do so. 

The next day, Clark was arrested in Mexico.

U.S. authorities have not detailed to whom exactly the “tried to kill” message is a reference. Clark is, however, charged with arranging the targeted murders of several people in Ontario, including an innocent Indian couple in Caledon, Ont.

At a news conference last week, U.S. authorities claimed Wedding’s drug organization is behind “dozens” of murders. 

Sokolovski’s lawyer for his civil lawsuit is Sohaib Habib. Reached by the Star late last week, Habib said he had not yet learned his client had been arrested on U.S. money laundering charges. Nor did Habib know that his client had been interviewed by FBI special agent Hannah Monroe, the lead investigator in the Ryan Wedding case, in Chicago this April — the month before Habib filed the KuCoin lawsuit on Sokolovski’s behalf. (Court documents do not detail what was discussed in that Chicago interview, which also involved the RCMP.)

Habib and fellow Delex LLP partner Brendan Peters — who were profiled in the Star in an unrelated story published the same day as Sokolovski’s arrest — are experts on cryptocurrency fraud. In an interview with the Star, they said Sokolovski had a legitimate case to be fought against KuCoin’s parent companies; they questioned the legitimacy of freezing Sokolovski’s accounts.

The lawyers knew nothing of Sokolovski’s alleged criminal allegations, Peters said. “We were dealing with the victim of the scam,” he added. (Neither lawyer weighed in on the criminal case against Sokolovski. Speaking generally, Peters said: “I think one way to look at it is, criminals can get scammed.”)

In an affidavit, Sokolovski claimed the Indian police investigation was itself a scam intended to take control of his crypto assets. “I cannot shake the feeling that I am being extorted,” he wrote.

The Star has not been able to verify whether the Indian investigation was real. The lawsuit includes an email from a purported Indian investigator referencing that Tether, the company behind the cryptocurrency, had frozen a suspicious wallet that sent allegedly stolen assets to Sokolovski. 

Sokolovski’s expert report notes that this freeze happened in October 2024, well after KuCoin first froze his accounts. 

The extradition documents separately detail how, also that October, U.S. authorities obtained a warrant asking Tether to freeze more than a dozen cryptocurrency addresses allegedly used by Wedding and his associates.

An FBI spokesperson declined to comment because of the ongoing investigation and prosecution, and because Sokolovski’s civil lawsuit is before the courts.

KuCoin, which operates out of the Seychelles, has not responded to Sokolovski’s lawsuit.

KuCoin’s communications team said they could not comment. In an emailed statement, the company said it follows strict anti-money laundering and counterterrorism financing procedures.

Earlier this year, an Ontario judge issued an order that KuCoin release the three bitcoins from the watch sale; There is little recourse to make KuCoin comply with that order, Habib said. 

In the past five to six years, changes in regulations have made major platforms like KuCoin more “dangerous for the criminals,” said Andreas Park, a professor of finance and founder of the University of Toronto’s blockchain research lab.

Users now have to disclose their real identities, which opens up the risk that their accounts may be frozen if they are associated with crime, he said. Meanwhile, crypto exchanges are also increasingly co-operating with police investigators, “otherwise they would, and their owners and their CEOs would, subject themselves possibly to criminal prosecution.”

Had it all just been cash-based, Park said, they “would not have been able to actually catch this guy.