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Ukraine Takes Hard Line Against Illegal Crypto Exchanges

Amid a series of crackdown on illegal crypto activities, Ukraine beams its regulatory searchlight on illegal cryptocurrency exchanges. According to reports, these exchanges have allegedly facilitated illicit operations such as remittance documents and payment cards within the country. Following this, the Security Service of Ukraine (SBU) shut down these exchanges.

The SBU claimed that the exchanges belonged to a network mostly involved in activities outside the radar of Ukrainian regulators. In view of their operations, these exchanges pooled over $1 million as monthly inflow from receiving 10% interest on every transaction conducted on their platforms.

SBU Says Illegal Crypto Funds Used to Finance Protests in Ukraine

Although the SBU failed to disclose the names of the exchanges involved, it alleged that they were popular, especially among individuals receiving funds from the digital wallets of blacklisted organizations outside Ukraine. Most of the funds generated by the said individuals were used in financing insurrections during the commemoration of Ukraine’s Independence Day.

Activities of the illegal exchanges also included providing cover for some questionable transactions. However, with the latest crackdown by the SBU, the cover has been blown. The illegal funds were received from digital wallets such as YandexMoney, Webmoney, Qiwi. A portion of the funds went into settling the agents contracted to carry out the Independence Day protests.

In the wake of the crackdown, the SBU visited a number of offices belonging to the illegal exchanges. These offices were situated in some districts across Ukraine’s Capital city, Kyiv. During the search, authorities confiscated a number of items which include, computers, mobile phones connected to VPN, documents relating to fake companies registered within the country and a cash sum of $37,330. The SBU declared that investigation is in progress, after which parties involved will be duly prosecuted.

Illegal Crypto Mining Farms Outlawed in Ukraine

It would be recalled that Ukrainian authorities had embarked on a similar mission against illegal crypto mining farms earlier in August. The raid had seen the SBU seize hundreds of mining hardwares from an illegal mining farm using an abandoned power station for its operations.

If the actions of authorities are anything to go by, one would realize that crypto-related businesses not registered with relevant regulatory bodies will not be allowed to operate in Ukraine. Also in August, Ukraine declared intentions to embrace crypto payments with the introduction of a new bill. In an ensuing report, Deputy Minister of digital transformation, Oleksandr Bornyakov, clarified that the bill was not geared towards making any cryptocurrency a legal tender, but to facilitate purchases with crypto payments.

In a July law, Ukraine empowered its apex bank, the National Bank of Ukraine (NBU) for the issuance of a central bank digital currency (CBDC), a digital version of the country’s official currency, Hryvnia.

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