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Ukraine Blocks Cryptocurrency Wallet Used to Raise Funds for Russian Forces

Ukraine’s law enforcement and counterintelligence agency managed to seize funds in a cryptocurrency wallet used to finance the Russian military campaign in the country. Kyiv officials say the money raised through the wallet was spent on military equipment for pro-Russian separatist forces in the east.

Ukraine Seizes Cryptocurrency Donations Funding Russian Invasion

The Security Service of Ukraine (SBU) has for the first time implemented a mechanism to curb fundraising through cryptocurrencies for troops fighting on the Russian side in the ongoing hostilities in the country. The conflict turned into a full-scale war when the Russian army crossed the border into Ukraine in late February in what Moscow calls a “special military operation” in support of the pro-Russian breakaway regions of Luhansk and Donetsk.

In a press release on Tuesday, the SBU announced that a cryptocurrency wallet operated by a citizen of the Russian Federation and used to sponsor Russia’s military effort in Ukraine was blocked. The man, who volunteered, has been raising money for the needs of the Russian forces since the invasion began.

The wallet had accumulated digital coins worth 800,000 hryvnia (nearly $22,000 at current exchange rates) by the time it was blocked, the SBU said, adding that the funds had already been seized. Experts are now working to trace related transactions and transfer custody to Ukraine. The agency did not specify how it seized the wallet, but did reveal that it enlisted the help of foreign cryptocurrency companies.

Ukrainian investigators were able to establish that the owner of the wallet dedicated a significant part of the donated cryptocurrency to the purchase of military supplies for separatist fighters of the self-proclaimed Luhansk and Donetsk People’s Republics. Representatives of the National Police of Ukraine and the Public Ministry also participated in the operation.

Russian “volunteer” active on social media

The Russian activist has been actively seeking financial assistance on social media platforms since the beginning of the latest phase of the conflict. To promote his efforts, he regularly creates and publishes photo and video content, distributes publications published by partners and reports on the use of the funds raised, the SBU detailed without revealing the identity of the Russian.

A report by blockchain forensics firm Chainalysis last month revealed that 54 pro-Russian groups have collectively received more than $2.2 million in cryptocurrency. These organizations, which operate in Donetsk and Luhansk, received most of the donated amounts in bitcoin (BTC) and ether (ETH), but also in other cryptocurrencies.

Ukraine itself has relied on cryptocurrency donations, with the Kyiv government and volunteer groups raising digital money to fund defense efforts. Ukraine’s Minister of Digital Transformation Mykhailo Fedorov recently announced on Twitter that $54 million in cryptocurrency funds raised through the Aid for Ukraine initiative were spent to purchase armor, medicine, night visions, and even vehicles for the Ukrainian military.

The Ukrainian people have also received purely humanitarian aid from the crypto community and industry. European cryptocurrency exchange Whitebit, which has Ukrainian roots, has offered to support Ukrainian refugees through its representative offices abroad, and the world’s largest forex trading platform Binance has issued a card. of cryptocurrencies special for Ukrainians forced to leave their homes.

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Ukraine joins the European Blockchain Association as an observer

Ukraine has been granted observer status in the European Blockchain Association (EBP). Kyiv officials hope the move will make it easier for the Ukrainian government to implement blockchain technologies and lead to the adoption of more efficient cryptocurrency regulations.

Ukraine moves towards membership of the European Blockchain Association

Ukraine has been accepted as an observer in the European Blockchain Partnership (EBP), an initiative to develop an EU blockchain strategy and build blockchain infrastructure for public services. Observer status is a step towards full membership, which Ukrainian authorities and members of the cryptocurrency community have been pushing.

The push for the country’s accession to the EBP was initiated by Oleksii Zhmerenetskyi, chairman of the Blockchain4Ukraine interfactional association of Ukrainian lawmakers, and Konstantin Yarmolenko, who chairs the non-governmental organization “Ukrainian Virtual Assets”.

In March of this year, they sent letters to European Commission President Ursula von der Leyen and other EU representatives calling for the establishment of a common European blockchain infrastructure based on EBP.

In response to his appeal, the head of the executive body in Brussels confirmed Ukraine’s membership prospects as an observer. The country has now become the third non-EU country to participate in the initiative, besides Norway and Liechtenstein.

“Ukraine’s integration into the European Blockchain Association will strengthen joint work on the introduction of blockchain technology into government records and services,” said Ukraine’s Deputy Minister of Digital Transformation Alexander Bornyakov, according to his department.

Bornyakov, who represents the Eastern European nation on the EBP, recently attended an online meeting of all members. He added that joining will also promote “a highly efficient regulatory environment, including for the virtual asset market” in the country.

According to the head of Blockchain4Ukraine, Zhmerenetskyi, by joining the blockchain association, Ukraine will be in a better position to boost recognition of its higher education diplomas and driver’s licenses for millions of Ukrainian refugees in Europe.

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Crypto Firm Exmo Leaves Russia and Belarus Selling Part of Its Business

Russia-linked cryptocurrency exchange Exmo will no longer provide services to users in Russia, Belarus, and Kazakhstan.

London-based crypto exchange Exmo is the latest crypto trading platform to formally suspend its business in Russia and Belarus due to the Russian invasion of Ukraine.

Exmo is selling its digital assets business in Russia and Belarus to a Russia-based software development company, Exmo officially announced on April 18. At the time of this writing, the new owner and size of the company have not been disclosed.

“Unfortunately, we can no longer keep the high-risk part of the business, as a global group does not want to put global expansion plans at risk by keeping high-risk markets in its structure,” Exmo CEO Serhii said. Zhdanov. he told Cointelegraph.

The deal includes Exmo’s client accounts in Russia and Belarus, as well as local trust systems, Zhdanov said. The technical code of the platform is not sold and belongs entirely to the Exmo group.

As part of the deal, Exmo’s beneficial owner, Eduard Bark, will also leave the company, transferring his stake to Zhdanov.

In addition to Russia and Belarus, the deal also includes Exmo’s business in Kazakhstan, as the new owner’s team is based in Kazakhstan. The undisclosed buyer owns a Russian software development company and a Kazakhstan-based legal entity for a cryptocurrency exchange, the CEO noted.

“We put a lot of effort into the Russian part of the business, so we can assure you that it is now in good hands. The new owner not only follows the roadmap we created earlier, but will also reach new heights much more easily. We made this decision for the benefit of both parties,” Zhdanov said. The company said it will not penalize ordinary people or block accounts due to the sanctions in mid-March.

As part of Exmo’s exit from Russia and Belarus, Exmo amended its user agreement to state that Russian, Belarusian, and Kazakh residents will no longer be integrated into its platform. The exchange deactivated Russian ruble trading pairs on April 15.

Exmo is a major cryptocurrency exchange founded by Russian entrepreneurs Ivan Petuhovski and Pavel Lerner in 2013. The company’s departure from Russia will have a significant impact on the exchange, as Russia was one of its main markets, Zhdanov admitted, stating:

“A significant part of our business was located in Russia. We will have a revenue reduction of around 30%. However, in the long term, we are confident that this will accelerate our exponential growth and allow the company to become a unicorn in the next three years.”

“We consider going back when Russia is no longer classified as a high-risk country,” Zhdanov said.