The cryptocurrency industry in Ukraine is facing increased scrutiny as the National Bank of Ukraine (NBU) recently demanded four local crypto firms provide financial statements for the first two quarters of 2023. The affected companies include Kuna, CoinPay, GEO Pay, and Qmall. The NBU has given these firms a deadline of seven days to submit the requested financial data.
Ukraine announces one-week ultimatum for compliance
Michael Chobanyan, founder, and CEO of Kuna exchange, revealed this development on July 3, referring to a document distributed by the Ukrainian Telegram news channel “Politics of the country.” The NBU’s request encompasses financial statements, operating volumes, and information about the reception and transfer of funds. Additionally, the crypto firms have been asked to provide statements for all accounts starting from the beginning of 2023.
While the reasons behind the NBU’s latest actions remain unclear, Chobanyan expressed surprise at the demand, stating that such requests have never been made in Ukraine before. He mentioned that similar actions occurred back in 2015, before Kuna’s launch, but the government’s direction now appears questionable. In recent weeks, the first wave of searches in exchanges took place across Ukraine, triggered by the NBU, the Ministry of Internal Affairs, and the Security Service of Ukraine.
Chobanyan believes that more searches and actions against crypto exchanges are likely in the future. Due to what Chobanyan refers to as “predatory actions” by the NBU, Kuna exchange withdrew from its business-to-customer market in Ukraine in March 2023. This departure resulted in a significant decrease in exchange volumes, dropping by approximately 90% over the past few months. Chobanyan explained that Kuna had already lost around 60% of its volumes when it exited the Russian market in February 2022.
Crypto firms shift focus as regulatory pressure mount
Despite the growing hostility from Ukrainian authorities towards the crypto industry, Chobanyan sees a silver lining in the situation. He plans to focus on the European market, particularly the business-to-business (B2B) segment. Kuna recently launched KunaPay, a crypto-acquiring service, which could potentially be a reason for the government’s actions. Chobanyan remains optimistic about the shift towards a European focus, stating that he is grateful to the NBU for encouraging his company to become a successful European player rather than a niche Ukrainian one.
The recent actions by the Ukrainian government have raised concerns within the local cryptocurrency industry. As the NBU tightens regulations and demands more financial transparency, some companies like Kuna are shifting their operations away from the Ukrainian market. While the situation may pose challenges for local crypto firms, some are also exploring new opportunities in the European market.
As the situation develops, industry participants are closely monitoring the actions of the Ukrainian authorities and their potential impact on the cryptocurrency landscape in the country. It remains to be seen how these regulatory moves will shape the future of the crypto industry in Ukraine and whether the government’s actions will indeed stimulate the growth of successful European companies in the sector.
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