Russian Prosecutors Seek to Ban Venture Capital Fund Linked to Tech Pioneer, Seize Assets
Moscow – Russian prosecutors are seeking to ban the venture capital fund Almaz Capital and seize the assets of its founder, Alexander Galitsky, alleging “extremist activity,” according to a statement released Wednesday by the Moscow prosecutor’s office. The move comes amid a broader crackdown on individuals and entities perceived as critical of the Kremlin, particularly following the invasion of Ukraine.
Galitsky, 71, is a prominent figure in the history of Russian technology, credited with pioneering Wi-Fi and virtual private networks (VPNs) in the country during the 1990s. He founded Almaz Capital in 2008, aiming to connect Western investment with startups in Russia and Eastern and Central Europe. While headquartered in Portola Valley, California, Almaz Capital maintains offices in several countries, and Galitsky himself holds Dutch citizenship.
The Tverskoy District Court in Moscow will hear the administrative case against Galitsky and Almaz Capital Partners, though a hearing date has not yet been announced. The prosecutor’s office has not specified which assets it intends to nationalize.
Law enforcement sources, as reported by the state-run news agency TASS, allege that prosecutors suspect Galitsky and Almaz Capital of “supporting Ukraine in one way or another.” This accusation follows a pattern of the Russian government targeting individuals and organizations accused of disloyalty or aiding the opposing side in the conflict.
The legal action against Galitsky adds to a series of personal and financial difficulties for the tech entrepreneur. Last October, a Moscow court seized 435 million rubles (approximately $5.7 million) of his assets, including property in Moscow, as part of divorce proceedings with his ex-wife, Aliya Galitskaya. Tragically, Galitskaya died by suicide last month after being arrested on extortion charges, a case that was subsequently dropped, according to her lawyer.
Galitsky previously served on the board of directors of Alfa-Bank until March 2022, when he resigned following the imposition of EU sanctions on the bank’s co-founders, Mikhail Fridman and Pyotr Aven, in response to the war in Ukraine.
The case against Almaz Capital is part of a wider trend of increased scrutiny and restrictions on foreign investment in Russia, spurred by international sanctions and the ongoing geopolitical tensions. According to a recent report by Yahoo Finance, anti-Russia sanctions are prompting venture capital firms to disentangle themselves from Russian-linked investments. The move against Galitsky’s fund underscores the growing risks for investors operating in or with ties to Russia.
The Moscow Times, which first reported the story, has itself been designated as an “undesirable” organization by the Russian government, facing increasing pressure and restrictions on its operations.
