Securities Regulation Daily Wrap Up, FRAUD AND MANIPULATION—E.D.N.Y.: E-wallet operator did not misrepresent compliance with Russian law, (Nov 18, 2025)

By Rodney F. Tonkovic, J.D.

The court found no actionable misstatements or scienter and denied leave to amend after second attempt.

A fraud complaint alleging that the operator of an electronic wallet platform misled about its compliance with Russian regulations was dismissed. The district court sitting in Brooklyn held that investors failed to plead any actionable misstatements or omissions and denied leave to amend (In re Qiwi plc Securities Litigation, No. 20-cv-6054 (E.D. N.Y. Nov. 17, 2025)).

Qiwi. Qiwi plc operates a payment network through electronic wallets and kiosks, enabling instant transactions in Russia and nearby countries. Its Qiwi Wallet ran on Qiwi Bank, a platform that was licensed and regulated under Russian law.

Online betting is permitted by Russian law, and betting was a major revenue source for Qiwi during the period at issue. However, from 2013 to 2020, Russia tightened rules against anonymous gambling payments, and Qiwi faced scrutiny for links to unlicensed sites.

Although transfers to illegal bookmakers were eventually banned, the complaint alleges that Qiwi continued allowing such operators access, merely warning investors of risks. Later, cash withdrawals from anonymous wallets were prohibited.

In 2020, Qiwi reported a drop of nearly 1 million e-wallet accounts due, it said, to new restrictions, while assuring that it was in compliance with the applicable regulations. Later that same year, Qiwi failed a routine regulatory audit, prompting this complaint's allegations that Qiwi's compliance claims were false.

First amended complaint dismissed. The court earlier dismissed the first amended complaint, finding that the plaintiff failed to plead any material misstatements or scienter on the part of any defendant. Among other reasons, the court said that the plaintiff failed to specifically identify what Russian gambling regulations Qiwi was allegedly violating or what reporting or recordkeeping requirements were violated.

Dismissed again. The second amended complaint brought the same claims with additional allegations, and the court again concluded that the claims were deficient. This time, the complaint was dismissed without leave to amend.

The court first found that the complaint failed to plead any actionable misstatements or omissions in any of the three categories of alleged misstatements. As with the earlier complaint, the plaintiff alleged breaches of Russian "Know Your Client" rules and betting law amendments, but only mentioned these laws generically and did not plead specifically how any violation had occurred. Plus, there was no duty to disclose uncharged and unadjudicated wrongdoing.

Next, Qiwi's statements about the strength of its internal controls were nonactionable opinions. The complaint failed to plead what controls were ineffective, when, or in what way and, the court said, simply tried to work backwards from the fact of the failed audit. In addition, Qiwi’s disclosures included explicit warnings about regulatory audits and compliance risks, which undercut claims of misleading omissions.

Finally, the complaint again failed to plead scienter for any defendant. The allegations were largely recycled from the first complaint and again failed to show that any individual defendant had knowledge of facts or access to information that contradicted their public statements.

The case is No. 20-cv-6054.

Judge: Cogan, B.

Attorneys: Phillip Kim (The Rosen Law Firm, P.A.) for Dale H. Ochakoff. Alex Drylewski (Skadden, Arps, Slate, Meagher & Flom LLP and Affiliates) for Qiwi PLC, Boris Kim, and Sergey Solonin.

Companies: Qiwi PLC

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