The live-service video game economy runs on microtransactions, and Xsolla is one of the companies that helps process them. The payment platform works with Epic Games, Unity, Roblox, and others to collect money from players all over the world. Now a new lawsuit alleges that Xsolla has mishandled $40 million and fired the whistleblower who disclosed the crimes to his bosses.
Emil Aliyev, the former VP of global accounting at Xsolla, filed a lawsuit in Los Angeles Superior Court on November 22 claiming wrongful termination and retaliation against a whistleblower. The lawsuit says Aliyev discovered $40 million was missing from two accounts back in May of this year and that he later found the money had been dispersed to a Goldman Sachs bank account that belonged to Xsolla founder and chairman, Aleksandr Agapitov. Aliyev also alleges that Xsolla hasn’t passed an IRS audit since 2017.
The lawsuit continues:
In or around May 2023, Mr. Aliyev reported his findings to the Chief Financial Officer, Leon Perry (“Mr. Perry”). Mr. Aliyev made a complaint to Mr. Perry that it was illegal for Xsolla to provide Mr. Agapitov with monetary loans without charging a standard interest rate, which Xsolla had not done. Mr. Aliyev also made a complaint that Xsolla failed to report the approximately 40-million-dollar loan to Mr. Agapitov to the Internal Revenue Service (“IRS”). Mr. Perry responded and acknowledged the deficiencies and the monetary disbursements, but ultimately brushed off Mr. Aliyev’s complaints and stated, “It is not your problem.” Mr. Aliyev responded, “This is my job.”
Aliyev claims he was later called into 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, but wouldn’t say which one, and the lawsuit alleges he was actually “unlawfully terminated for reporting financial mishandling.”
Aliyev and Xsolla did not immediately respond to requests for comment.
If Xsolla sounds familiar, it might be because cofounder Agapitov laid off 150 of his employees for spending too much time looking at their email. “Work your fucking ass off or get your fucking ass out,” he wrote on X (formerly known as Twitter) back in 2021. Agapitov even boasted of using AI surveillance to monitor which employees were being lazy before deciding who to cull in the mass layoff.
Earlier this month, Ukraine called on Epic, Ubisoft, and Valve to stop working with the payments platform, claiming Xsolla’s business in Russia helped fund that country’s ongoing war machine. Xsolla interim CEO Chris Hewish told Axios the company had already relocated hundreds of workers out of Russia, though it still facilitated transactions for players there. In the meantime, Xsolla has been using its lucrative business to launch funding initiatives for indie games and snatching up smaller gaming tech companies to provide additional services beyond payment processing, like backend multiplayer support and creator content tools.
Update 11/30/2023 5:37 p.m. ET: Xsolla owner Agapitov told Kotaku in a phone interview that the $40 million loan did not run afoul of any regulations and that Aliyev tried to blackmail the company after being fired. “We hired a liar and fired a liar,” Agapitov said.
