Ukraine’s Security Services Break up Crypto-Laundering Syndicate

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In Brief
  • Ukraine's national security service (SBU) announced Friday it had broken up a rink of exchanges involved in illegal activity.

  • The SBU alleges the group participated in money laundering and funding provocations in protest of Ukraine.

  • Among the items seized were many computers, mobile devices and more than $30,000 in cash.

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Local reports from Ukraine say that the agency has shut down several cryptocurrency exchanges in Kyiv for their roles in a cryptocurrency-laundering operation. 

The Security Service of Ukraine (SBU) has announced via press release they have successfully broken up a “network of clandestine cryptocurrency exchanges in Kyiv.” The agency also stated that the exchanges were involved in other illicit financial activities such as remittance documents and payment cards. 

Ukraine cracking down on illegal blockchain activity

According to the SBU, the operation saw a monthly turnover on the network of more than $1 million due to receiving up to 10% interest from each transaction on its platform. The money was partially used to finance “provocations on the Independence Day of Ukraine,” according to the SBU. The illegal exchanges were very popular, according to SBU, because they provided anonymity of transactions that may or may not be related to money laundering. The report goes on to allege that, “the services of these online exchangers were mostly used by individuals. In particular, they were used by persons who received funds from e-wallets of the aggressor country banned in Ukraine.”

The SBU gives a few examples of these e-wallets including Yandex Money, Qiwi, and Webmoney.” The SBU also stated that the clients of these exchanges were among the organizers of a mass protest  on Independence Day of Ukraine and “received money to pay for the services of provocateurs using this particular network.” 

The search for the alleged offenders took the SBU to exchange offices in the Pecherskyi, Shevchenkivskyi, and Solomianskyi districts of Kyiv. During the raids, agents seized numerous computers of server machines, which the SBU hopes contain evidence of illegal activity. Additionally, a number of mobile devices with VPN software installed were confiscated. Seals and documents for dummy companies that are registered in Ukraine and alleged used for laundering activities were also discovered along with $37,330 in cash.

The SBU says that “The investigation is ongoing to prosecute those involved in money laundering and illegal actions in respect of remittance documents, payment cards and other means providing access to bank accounts, and equipment for their production.”

The operation was run by the SBU Main Directorate in Kyiv and the surrounding regions. The group has also served notices of suspicion to three other exchanges since the beginning of 2021.

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Matthew De Saro is a journalist and media personality specializing in sports, gambling, and statistics. Before joining BeInCrypto, his work was featured on Fansided, Forbes, and OutKick. With a background in statistical analysis and a love of writing, he takes an outside-the-box approach to reporting news.

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