National Bank of Ukraine Struggles to Clarify Bitcoin’s Legal Status as Mining Farms in Kyiv Raided by Police

News and Analysis

According to the official comment by Oleg Chupriy, the deputy chairman of the National Bank of Ukraine, Bitcoin has no legal status in Ukraine.

“Determining such a status is complicated due to the lack of unanimous approach towards classification of Bitcoin and regulation of its transactions globally,” he wrote on NBU’s official Facebook page.

The official also noted that in some countries cryptocurrency transactions are not only legal but are also subject to taxation.

“Bitcoin is classified differently in different countries: as a virtual currency, as a money surrogate, as an intangible value, as a virtual commodity, and so forth. On our part, Ukraine’s National Bank is not officially corroborating any of such definitions,” Mr. Chupriy wrote.

Back in 2015, National Bank of Ukraine said it was ready to work on Bitcoin legalisation. Also the regulator conceded the possibility of integrating Bitcoin in Ukraine’s financial system.

Mr. Chupriy also stated that in order to reach an unanimous position in regard to the legal status and regulation of bitcoin, the regulator has commenced a dialog with the Ministry of Finance, the State Fiscal Service, the State Service for Financial Monitoring, the National Securities Commission, and the National Commission for State Regulation of Financial Markets.

The matter will be discussed at the nearest meeting of the Financial Stability Council scheduled for late August, Churiy said.

Bitcoin mining farm raid

NBU’s remarks come amidst a peculiar twist of events, when Ukrainian law enforcements have put to a halt operation of a mining farm located in an abandoned swimming pool in the country’s capital of Kyiv.

According to newly released court documents, Ukraine’s National Police have seized 200 computers and arrested several suspects who were illegally producing bitcoins at the Paton Institute of Electric Welding recreation center.

According to the court ruling that justified the seizure, the defendants “pursued personal vendible interests to produce and issue money surrogates of Bitcoin cryptocurrency” have located mining devices with the cooperation from the swimming pool’s employees.

The court considered it “counterfeiting of bank documents” as “issuance and turnover of money surrogates in Ukraine are prohibited according to clause 32 of the Law on the National Bank of Ukraine.”

According to the ruling, the criminals proceeded with converting cryptocurrency into fiat and then sending it to the accounts of fake companies seeking to cash it later.

The court granted permission to search the premises of the swimming pool to the police so that they would seize the equipment and documents related to mining of cryptocurrency.

Also, as ForkLog reported separately, miners in Ukraine in general have become objects of interest for the SBU, the country’s security service, and other law enforcement agencies.

Notably, there is no law in Ukraine that directly prohibits cryptocurrency mining.

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