Law enforcement officials have uncovered a fraudulent network of crypto exchanges operating in seven regions of Ukraine and, during searches, seized cash in various currencies totaling more than 20 million hryvnia, according to Ukraine’s Prosecutor General Ruslan Kravchenko.
According to him, under the guise of a currency and crypto-asset exchange service, the scheme’s participants defrauded citizens of their funds. To do so, they used a website, Telegram, an order system, confirmation codes, and a network of exchange locations, creating the impression of a legitimate financial service.
As Kravchenko explained, after a request was submitted, a manager would contact the client to provide the request number, a unique confirmation code, the address of the exchange location, and other details. After handing over the cash, clients received neither crypto assets nor a refund; instead, they were given vague explanations, and the process was dragged out indefinitely.
According to the Prosecutor General, while the crime was being documented, members of the network used a similar scheme to embezzle 50,000 UAH as part of an undercover purchase, which, in his opinion, indicates that a well-established mechanism was in operation.
“If a person transfers money and receives nothing in return, that is not a business model but a subject of criminal proceedings,” Kravchenko noted.
He also reported that notices of suspicion are being prepared for the scheme’s participants regarding the fraudulent misappropriation of another’s property, committed by a group of individuals acting in concert, and that the investigation is ongoing to identify all those involved in the platform’s operation—from the organizers to the individuals who accepted funds from the victims.
For its part, the National Police of Ukraine reported that investigators and cyber police, as part of the criminal investigation into the fraud, are conducting more than 40 urgent searches at the residences of those implicated and at currency exchange offices.
“The currency exchange network was conducting business activities without the appropriate licenses. Furthermore, under the guise of providing currency exchange services and purchasing cryptoassets, its members embezzled citizens’ funds. After transferring the money, the victims did not receive the promised cryptoassets, and contact with the suspects was severed,” reads a statement released on the National Police’s Telegram channel by its press service.
The police also reported that, as part of the investigation, documents, vehicles, and cash are being seized to facilitate the subsequent compensation of losses to the victims. One member of the criminal group has been detained in accordance with Article 208 of the Criminal Procedure Code of Ukraine. He is to be notified of the charges against him and served with a motion for the imposition of a preventive measure.
The National Bank of Ukraine (NBU) records cases of unlicensed activity in the market of non-banking financial services, in particular the exchange of cryptocurrencies for currency, transfer of funds and provision of loans and will strengthen its supervision over this.
“We are systematically working to limit any opportunities to use banking and payment infrastructure to serve the shadow sector of the economy(…) In the future we will intensify activities,” NBU head Andriy Pyshnyy said on his Facebook.
He stressed that detenization will contribute to the formation of a sustainable investment resource for the economy, and also reported the launch of a new area of work of the NBU – identification of unlicensed activities in the market of non-banking financial services and payment market.
“Unfortunately, we see that outside the legal framework of Ukraine and the appropriate supervision of the NBU citizens are offered services that have signs of financial: transfer and disbursement of funds, granting loans, exchange of crypto for currency”, – wrote Pyshnyy.
The head of the NBU noted that the goal is not only to identify unauthorized market participants, but also to return them to the legal field or initiate prosecution.
As reported, the National Bank continues to investigate the work of companies that may provide financial services without appropriate licenses, these are “Exchange24”, “X-Change”, “Liberty Finance” (“KYT GROUP”), “Tsarsky.io”, ‘FinMobile’ and “Trustee Plus”.
The Binance cryptocurrency exchange (based in China) has announced the start of cooperation with the Kyivstar mobile operator.
As noted in the joint release of the companies, distributed on Thursday, within the framework of this partnership, Kyivstar users interested in innovation, blockchain, investments and financial products will have access to a wide range of cryptocurrency opportunities.
All customers of the mobile operator in the My Kyivstar application will be able to receive a special bonus promo code, which can then be used when registering on Binance.
In the future, Binance and Kyivstar plan to work together to improve crypto literacy in Ukraine, which will help lower the barriers to start using digital assets in everyday life.
As reported, in September, the WOG filling station network became a partner of the Binance blockchain ecosystem and launched the possibility of paying for fuel with cryptocurrency using Binance Pay.
In May, the Foxtrot network became a partner of the Binance blockchain system and launched the ability to pay for goods in the online store and retail outlets of the network using Binance Pay.
Earlier, Binance planned to launch a payment card in Ukraine with a balance in cryptocurrencies and automatic conversion upon payment.
Binance is the world’s leading blockchain system and cryptocurrency infrastructure provider with a range of financial products including the largest digital asset trading exchange by volume.
South Korean Samsung Electronics may launch its own cryptocurrency exchange next year, according to Market Watch, citing local media.
Samsung is one of seven South Korean companies that have recently submitted applications to regulators for licenses needed to create a cryptocurrency exchange. Other companies include Mirae Asset Securities Co., one of the nation’s largest stock market brokers.
According to South Korean media, Samsung expects to create a new exchange in the first half of 2023.
This is not Samsung’s first move into the cryptocurrency market. Earlier this year, the company added a cryptocurrency wallet feature to its Galaxy smartphones.
The EXMO cryptocurrency exchange has sold part of its digital assets business in Russia, Belarus and Kazakhstan, the exchange said on Tuesday.
According to the exchange, EXMO announced the transfer of part of the business to Russian owners and the termination of work with the markets of Russia, Belarus and Kazakhstan, after Russia invaded the territory of Ukraine and started a full-scale war.
The company said that this was done in order to continue to fulfill obligations to customers and stakeholders, as well as to ensure a high level of protection and security.
“It’s been a tough decision for us, since we have spent over eight years building a strong community of crypto enthusiasts throughout the world, adhering to the highest compliance practices and delivering outstanding services to all our clients wherever they lived. However, following Russia’s invasion of Ukraine, EXMO.com as a global group wishes to avoid risking our global expansion plans by operating in such high risk markets,” CEO of the crypto exchange Serhiy Zhdanov said, commenting on the situation.
Kazakhstan clients were also included as a part of the deal, since a new team is based in Kazakhstan. The new owner of the Russian, Belarusian and Kazakh digital assets exchange business is the owner of a Russian based software development company, which was one of the vendors to provide engineering services to EXMO during the last three years.
EXMO.com user agreement was recently amended to state that Russian, Belarusian and Kazakh residents are no longer being onboarded. Russian Rubles pairs were disabled since April 15, 2022 on EXMO.com.
Earlier, the EXMO cryptocurrency exchange created the Save Ukraine Relief Fund to raise funds to help Ukrainian citizens affected by the war.
EXMO’s own contribution amounted to $1 million and has so far collected $594,000 through crypto contributions from exchange users.
EXMO is an international cryptocurrency exchange founded in 2014. The platform provides cryptocurrency trading and storage opportunities for more than 2 million traders from all over the world.
BUSINESS, CRYPTOCURRENCY EXCHANGE, DIGITAL ASSETS, EXMO, RUSSIA
