Fortnite Microtransaction Company Sued by Whistleblower

The live service video game economy is based on microtransactions, and Xsolla is one of the companies that helps process them. Works with payment platform Epic Games, Unity, robloxand others to collect money from players around the world. Now a new lawsuit alleges that Xsolla misdirected $40 million and fired the whistleblower who revealed the crimes to his bosses.

Emil Aliyev, former vice president of global accounting at Xsolla. filed a lawsuit On November 22, a lawsuit was filed in Los Angeles Superior Court against a whistleblower, alleging wrongful termination and retaliation. The lawsuit states that Aliyev discovered $40 million was missing from two accounts in May of this year and later determined that the money was distributed to the Goldman Sachs bank account belonging to Xsolla founder and chairman Aleksandr Agapitov. Aliyev also claims that Xsolla has not undergone an IRS audit since 2017.

The case continues as follows:

In or about May 2023, Mr. Aliyev reported his findings to Chief Financial Officer Leon Perry (“Mr. Perry”). Mr. Aliyev complained to Mr. Perry that it was illegal for Xsolla to provide monetary loans to Mr. Agapitov without charging a standard interest rate, which Xsolla did not do. Mr. Aliyev also filed a complaint that Xsolla failed to report approximately $40 million in loans to Mr. Agapitov to the Internal Revenue Service (“IRS”). Mr. Perry responded and acknowledged the shortcomings and the money payments, but ultimately ignored Mr. Aliyev’s complaints and said, “It’s not your problem.” Mr. Aliyev replied, “This is my job.”

Aliyev claims he was later summoned to a meeting with Agapitov on July 28, explained why he thought the transactions violated finance rules, and was fired a few days later. Xsolla apparently fired Aliyev for violating company policy, though he didn’t say which, and the lawsuit alleges that Aliyev was actually “unlawfully terminated for reporting financial mismanagement.”

Aliyev and Xsolla did not immediately respond to requests for comment.

If Xsolla sounds familiar, it might be because co-founder Agapitov laid off 150 employees because they spent too much time on their emails. “Either get your ass up or take it off” he said wrote to x (formerly Twitter) in 2021. Agapitov boasted of using AI surveillance to monitor which employees were lazy before deciding who to choose in a mass layoff.

Ukraine at the beginning of this month was called Epic, Ubisoft and Valve have stopped working with the payment platform, claiming that Xsolla’s business in Russia helps finance that country’s ongoing war machine. Chris Hewish, interim CEO of Xsolla said axios The company had already moved hundreds of workers out of Russia, but was still facilitating transactions for players there. Meanwhile, Xsolla uses its lucrative business to: launch funding initiatives for indie games And snapping up smaller gaming tech companies providing additional services beyond payment processing, such as backend multiplayer support and creator content tools.

Update 11.30.2023 17:37 ET: Xsolla’s owner Agapitov told Kotaku He said in a telephone interview that the $40 million loan did not violate any regulations and that Aliyev tried to blackmail the company after he was fired. “We hired a liar and fired a liar,” Agapitov said.



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