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Due to national security concerns, the U.S. officials asked Max Polyakov, a successful Ukrainian tech entrepreneur to resign and sell his share in the rocket company Firefly Aerospace Inc.

Polyakov received a request to resign

Polyakov ruled a private rocket company near Austin, Texas for several years. He achieved success in the Ukrainian software market and decided to move forward and rescue Firefly from bankruptcy in 2017. The U.S. government and aerospace industry officials claim that Polyakov’s access to all the company’s materials can lead to the leak of some valuable technologies to Ukraine, Russia, or other nations trying to develop rocket programs, writes Bloomberg in the original article. Back in 2020, Polyakov agreed to resign and sell his share even after contributing over $200 million on his fortune into Firefly. Such a decision is supposed to help the company get U.S. government financial support without any obstacles. 

In 2021 Polyakov received a letter from the Committee on Foreign Investment in the U.S. (CFIUS) referring to national security concerns and asking Polyakov and his investment firm Noosphere Venture Partners to sell off their roughly 50% stake in Firefly. Polyakov’s spokesperson said that he has accepted the request while maintaining that his ownership of Firefly poses no national security threats. “Noosphere Ventures announced today that it intends to retain an investment banking firm to assist in the sale of Noosphere Ventures’ ownership interest in Firefly Aerospace,” Polyakov’s company said in a statement.

Polyakov is a Ukrainian obstetrician-gynecologist, but he challenged himself in the software business, internet gaming, dating, and marketing sites. In 2017 he helped Firefly company to overcome the bankruptcy and gave them money to restore it. In September 2021, Firefly launched its rocket, though it didn’t reach orbit, the rocket performed well.

The U.S. governemnt wants to secure Firefly’s technology

The U.S. government has frozen further activity of Firefly while Polyakov is still in his position. The clashes between Polyakov and the U.S. haven’t been previously reported.

Ukraine is amid the ongoing conflict with Russia, which is also a weighty argument for the U.S. government. Russia has been building up forces at the Ukrainian border, heightening fears that it will invade the country, and the U.S. officials want to secure valuable technology.

In November of 2020, Polyakov stepped down from Firefly’s board, and then in May of 2021, he sold off a large chunk of his stake in Firefly, as the company raised $75 million and obtained a valuation of more than $1 billion. These moves, along with the appointment of former government officials to Firefly’s board, were meant to open the way for more government contracts. Polyakov pulled back from the company and has said he was leaving all of the business and technology decisions to Firefly Chief Executive Officer Tom Markusic, who previously worked at NASA and Elon Musk’s Space Exploration Technologies Corp.

“Dr. Polyakov and his companies were extensively vetted, and no security issue was identified,” Noosphere Ventures said in its statement. “Noosphere Ventures and Dr. Polyakov understand that CFIUS’s actions come amid rising tensions between Ukraine and Russia. Noosphere Ventures is working diligently to address CFIUS’s concerns in the most efficient and appropriate manner possible.” A spokesperson for the U.S. Treasury Department, which chairs CFIUS, declined to comment. A representative for Markusic didn’t respond to a request for comment. 

Wrapping up

Polyakov takes a seat between such huge businessmen like Elon Musk and Jeff Bezos as these people poured a lot of money and effort into commercializing space. Firefly designs a mid-sized rocket that can deliver dozens of satellites into orbit on each launch.

According to Bloomberg, “Polyakov had moved his family to Silicon Valley and, in multiple interviews over the years, had characterized his large investment in Firefly as a patriotic gesture for the U.S. He voiced fears, which others in the aerospace industry shared, that Ukrainian technology could make its way to North Korea, Iran or other enemies of the U.S. without an infusion of money and interest in the local aerospace industry.”

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