Ukraine has passed new regulations that allow the country’s government to block cryptocurrency wallets and seize assets it deems illegal. In a statement published last week, the Finance Minister revealed that the government will also increase its surveillance over the crypto industry as it seeks to stamp out crypto crime.
The enhanced supervisory activities will be overseen by Ukraine’s State Financial Monitoring Service (SFMS), the Minister, Oksana Markarova revealed. The SFMS reportedly has an analysis tool that allows it to investigate the origin of any crypto. The tool is already in use and has already led to several completed cases, both locally and internationally, he claimed.
The biggest revelation, however, was that the Ukrainian government will now be able to “block crypto wallets and remove illegally obtained crypto assets. This can be done by gaining access to the crypto’s private keys as a result of complex investigations.”
The statement didn’t expound on how the government will be able to do this and despite several media requests, the SFMS has also not given further insight into the issue.
The new law now puts crypto businesses under the purview of the country’s financial regulators. Businesses dealing in the exchange, storage, sale or transfer of cryptos will all be included in the new policy framework.
Any exchange or financial institution that process transactions worth more than UAH 30,000 ($1,230) must “verify such transaction and collect detailed customer information.” The customer will have to provide detailed information about the origin and destination of the crypto, the statement says. The exchange will have to report any such transaction it considers suspicious to the SFMS. Once a client’s details are verified by the exchange, he can then conduct the large trades until a time when the exchange notices suspicious activities.
The Minister also had some positive news for the crypto industry, revealing that the government was working on a comprehensive legal framework for crypto in accordance with EU directives and FATF recommendations.
He stated, “The purpose of public financial monitoring is to prevent money laundering and legalization, including through cryptocurrencies. But I think that our criminals and corrupt officials are quite conservative and still keep the funds mostly in cash. Therefore, in the legalization of cryptocurrencies, I see opportunities for the development of this industry in our country, not a threat.”
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