Ukraine’s counterintelligence security agency has shut down a network of reported illegal exchanges that have been used in illicit financial transactions. The exchanges allowed their users to launder money by failing to implement any Know Your Customer requirements, according to authorities.
The Security Service of Ukraine (SBU) announced the shutdown via a press release, describing them as “a network of clandestine cryptocurrency exchanges” operating in the capital, Kyiv.
According to the SBU, the network had a monthly turnover of up to $1.1 million. It reportedly turned a blind eye to the source of the digital currencies on its platform, and for this, it charged up to 10 percent in fees for each transaction. The exchanges also promoted anonymity, making them popular to those with something to hide, according to the agency.
SBU alleges that a large portion of the funds received on these exchanges was from e-wallets in countries that Ukraine is at odds with, including Russia. The agency specifically cited Qiwi, Yandex.Money and Webmoney, all digital payment platforms founded in Russia that the National Bank of Ukraine banned years ago.
SBU further alleged that some of the users of the clandestine exchanges were “organizers of mass protests on the eve of the Independence Day of Ukraine. They received money to pay for the services of provocateurs using this particular network.”
The network of exchanges has reportedly been operating since the beginning of 2021. In that time, it has attracted over 1,000 clients.
The authorities seized computers and servers and mobile devices with evidence of the exchanges’ alleged illegal activities. They also seized “seals and incorporation documents of dummy companies, registered in Ukraine and used for money laundering activities.” SBU further took in $37,330 in foreign currency.
The SBU, which is the country’s main security agency in matters counterintelligence and combating terrorism, pledged to continue investigations into the network and other illicit digital currency activities.
In recent years, the agency has been targeting illegal digital currency operations. Last month, the agency busted what it described as “the largest illegal crypto farm,” containing over 5,000 units of hardware, with close to 4,000 PS4 gaming consoles.
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