• Ukraine shuts down cryptocurrency exchanges that send funds to Russian wallets

  • The Ukrainian Security Service (SBU) has shut down a number of “underground” cryptocurrency exchangers in Kyiv. According to officials, the platforms generate a million dollars in monthly revenue and allegedly send money to digital wallets operated by Russian payment providers.

    In Ukraine, law enforcement apprehends cryptocurrency exchangers.

    Officers from Ukraine’s main law enforcement agency, SBU, have shut down a network of underground cryptocurrency exchangers based in Kyiv. According to an announcement, this year’s online platforms have processed up to 30 million Ukrainian hryvnia (more than $1 million) per month.

    Payments and withdrawals could be made and received anonymously through the exchangers. Their services were mostly used by private individuals, who frequently received funds to their electronic wallets from Russia-based payment service providers like Yandex. Money, Qiwi, and Webmoney are all prohibited in Ukraine.

    The SBU claims that some of the money was used to finance provocations on the eve of Ukraine’s Independence Day, August 24. The security service believes the organizers received funds from these exchangers to pay protest participants. The network has been operational since the beginning of 2021, according to the agency. It “served” over 1,000 “clients” during this time.

    Five raids were carried out on addresses in Kyiv’s Pechersky, Shevchenkivsky, and Solomyansky districts, during which SBU agents seized computers and server hardware, cellphones and mobile terminals that prevented geolocation, documents of fictitious entities registered in Ukraine, and foreign cash worth 1 million hryvnia (approximately $37,000).

    The operators of the websites charged a commission of 5 to 10% on the transferred amounts, according to the Security Service of Ukraine. The investigation is still ongoing to determine any illegal activity related to the network’s activities and the people involved, including documents, funds, and equipment, as well as money laundering.

    This year, the SBU has been targeting illegal cryptocurrency activities, but it has also made some mistakes during the crackdown. According to Forklog’s report, it exposed a group allegedly engaged in the legalization of illicit funds and their illegal transfer in April. The CEO of Hackcontrol, Nikita Knysh, stated that the case was about a cryptocurrency offline exchanger owned by partners of his in a different business, and that the accusations of fraud and money laundering were unfounded.

    In July, the security service announced the discovery of Ukraine’s “largest illegal crypto farm” to date, seizing approximately 5,000 units of hardware, including 3,800 gaming consoles and 500 video cards, from a warehouse in Vinnytsia. It was later revealed that the facility was a legal data center run by an IT company. Ukrainian media speculated that the Playstation 4 Slims seen in the SBU photos were most likely used for gaming purposes.

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