“Facade of skyscrapers”: how the Xettle case exposes the shadow industry of pseudo-fintech

Over the past three to four years, British money has increasingly migrated to the Persian Gulf and South Asia. London funds, tired of mature markets, hope to catch a new wave of growth — especially in the segment of digital payment services and microbanking. Meanwhile, Dubai is actively promoting itself as the “Middle Eastern Silicon Valley,” and Indian megacities are reporting double-digit rates of VC deals. But it is precisely at the junction of these two platforms that tree projects multiply rapidly: with bright landing pages, a LinkedIn team and a Dubai address, behind which there are neither licenses nor a working product.

Simulation under the cover of a skyscraper

Xettle Technologies is perhaps the most telling recent story. From the outside, it looks like an international fintech startup: a “global” office in Dubai, an operations center in India, helpfully placed “KYC”, “API”, “e-wallet” logos. Only with a detailed review, several unpleasant details are revealed. First, in the open registers of the UAE and the RBI, there is not a single license issued for processing payments. Secondly, the authorized capital is less than the price of a MacBook. Thirdly, profiles of “top managers” on LinkedIn are created in one day and are filled with template handwritten recommendations. In addition, five directors have changed in two years — and the founders Rahul Verma and Allanur Khilji withdrew from the list of directors retroactively, as soon as the first complaints appeared.

The picture is more like a digital decoration: the domain is rented, traffic is driven by bot traffic, presentations are collected from other people’s design templates. Everything was done only so that a British or Singaporean investor saw pathetic pictures of the 200th floor in DIFC and clicked “Wire funds”. 

A copypaste corporation instead of an ecosystem

Xettle does not exist alone – a swarm of clones revolves around it. InstapayX and EDGE Money Service live on neighboring servers: the same color, identical contact numbers, copied “mission” about financial inclusion. When one shell is overgrown with claims, the domain is silenced, and its design is transformed into a new project. Khildzhi already managed to appear on the Indian wanted list in the case of InstapayX – and escaped the court, signed a settlement agreement on the partial return of funds. The multi-brand effect allows scammers to start anew every time, without wasting time on product development: they only change the logo and the two-letter prefix to the word “pay”.

Why is the British wallet at risk?

Company registration in the UAE takes a couple of days, and the “Dubai address” effect works flawlessly: the London investor subconsciously equates it with strict regulation. At the same time, British corporate law remains one of the most liberal for non-residents from Commonwealth countries. As a result, the connection looks like this: money goes from the AIM exchange to the Dubai DCP, from there it is “sprayed” into nominal accounts in India, and a fresh SPV appears in London, which the same persons use as a showcase for a “successfully operating foreign portfolio”. In reality, the funds have long been dissolved in the chain of transit transfers.

In order to break this vicious chain, a strict cross-check of addresses and beneficiaries is needed. If the phone, IP and PO-box are the same for several “startups”, the registrar must block the next application until personal verification.

In addition, a white list of licenses is required. Access to bank payment gateways — only with a confirmed license from the UAE regulator or RBI, and not based on a pdf screen.

A public register of “frozen” directors is also required. Verma and Khildzhi have repeatedly left the boards of directors retroactively, because the UAE law allows retroactive change. If such maneuvers were automatically published, investors would have seen a red flag earlier.

The next step is due diligence by an independent auditor before the seed round. A traditional “data-room” for an early-stage boom seems redundant, but the lack of basic verification is a direct ticket to history like Xettle.

Conclusion instead of morality

The main lesson of the Xettle scam is not that “particularly inventive” fraudsters appeared somewhere. The problem is more systemic: any inspiring narrative about the “Dubai fintech cluster” easily turns into a wrapper for a good old financial pyramid if there are no transparent licenses and personal responsibility. As long as the regulators of the UAE and Great Britain do not synchronize the beneficiary bases, the history of phantom offices will repeat itself: today — between Bangalore and Dubai, tomorrow — already between Manchester and Abu Dhabi. The investor has only one thing left: they will check not the height of the skyscraper in the background photo, but the line in the register, where it is indicated in black and white whether the “digital bank” has the right to keep at least one real account.