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Thursday, June 1, 2023

Ukraine’s Financial Watchdog Reports Blocking Russian Crypto Exchanges

Ukraine’s Financial Watchdog Reports Blocking Russian Crypto Exchanges – The State Financial Monitoring Service (SFMS), a division of Ukraine’s financial intelligence agency, released a report detailing its activities in 2022. In addition to its usual tasks of preventing money laundering, the agency also revealed that it supported Ukraine’s defense efforts during the ongoing conflict with Russia.

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The Ukrainian financial watchdog announced this week that they have partnered with the Ministry of Digital Transformation and Ukrainian crypto experts to identify Russian crypto exchanges connected to sanctioned Russian financial institutions, including Sber, Russia’s largest bank. The exact number of platforms and their names were not specified, but the goal is to completely block them.

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Also, working closely with crypto service providers in Ukraine and abroad, the SFMS introduced a mechanism for the “blocking of crypto wallets of the Russian Federation.” It’s unclear whether it means Russian wallets in general or those linked to the government in Moscow. The state service reminded that last year it turned to Binance, the world’s largest crypto exchange, suggesting actions “to curb the aggression of the Russian Federation in the virtual assets market” and prevent peer-to-peer transactions for users of various Russian banks and payment systems.

“Other practical measures related to the blocking of Russian crypto assets and operations of Russian residents have been implemented,” the agency added without elaborating. It has been cooperating with the financial authorities of almost 140 countries on the matter while severing ties with regulators in Russia and Belarus. The SFMS also noted it’s involved in cooperation between Ukraine, Georgia, and Moldova — countries with a steadily growing crypto market and mining sector — focused on reducing money laundering through digital assets. 

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The project is being realized with assistance from the UN and OSCE. The report coincided with a statement by Ukraine’s Minister of Digital Transformation, Mykhailo Fedorov, promising that the country will become “the best crypto jurisdiction in the world” once it finalizes its regulatory framework for the industry.

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In the past few years, Ukraine established itself as a leader in crypto adoption in Eastern Europe and has been accepting crypto donations since the start of the Russian invasion. Its parliament passed a law “On Virtual Assets” last February and has been preparing respective amendments to the Tax Code.

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