Ukraine will block the Bitcoin accounts of “separatists” in the country’s east. Such was the statement of the head of the Security Service of Ukraine (SBU), Valentyn Nalyvaychenko.
According to Nayvaychenko, the SBU and the State Financial Monitoring Service will put special focus on cards and bank accounts, as reported by forklog.com. He also listed Bitcoin among the payment instruments subject to control.
Valentin Nalyvaychenko stated:
“Another aspect of the joint work of the SBU and SCFM, as well as the Ministry of Internal Affairs, where necessary, is the blocking of accounts, cards, various ‘bitcoins’ and so on, where the separatists are trying to funnel money.”
Nalivaychenko did not explain exactly how these Bitcoin ‘accounts’ would be blocked. Nevertheless, it appears that the largest commercial bank in Ukraine, Privatbank, has already suspended the account of the Ukrainian exchange btc-trade.com.ua, which posted the following tweet on March 19:
#приватбанк заподозрил нас в чем-то, приносим всем извинения, временно выплаты гривны приостоновленны...
— btc_trade_ua (@btc_trade_ua) March 19, 2015
Translation:
“Privatbank has suspected us of something, we apologize as we are temporarily suspending payouts in Hryvnia.”
Due to the protracted military conflict in the eastern Donetsk and Lugansk regions of Ukraine, the country's national currency, the Hryvnia, has been in free-fall since the beginning of the year.
But despite the previous warnings from authorities on crytocurrencies, this has raised hopes that cryptocurrency may be used as an option to retain people’s savings in the country, where capital controls have already been enacted to curb rampant inflation, where foreign currency such as the USD is scarce and where Bitcoin has been selling for way above its market value on Localbitcoins.
While cash withdrawals in the military operations zone have been carried out mainly through intermediaries in special exchange offices, according to forklog, it will be interesting to see whether the authorities will go after all of these third parties. More importantly, this experiment may also prove to be an interesting case study of whether the state is capable of stemming the flow of a decentralized and borderless form of money.
CoinTelegraph has reached out to the founder of the Ukraine Bitcoin Embassy and Kuna Bitcoin Agency, Michael Chobanian, for a comment but did not yet receive a response. We will keep you updated as the story develops.
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According to Nayvaychenko, the SBU and the State Financial Monitoring Service will put special focus on cards and bank accounts, as reported by forklog.com. He also listed Bitcoin among the payment instruments subject to control.
Valentin Nalyvaychenko stated: “Another aspect of the joint work of the SBU and […]