Concerns about potential new regulations have been stoked by the National Bank of Ukraine’s (NBU) requirement that local cryptocurrency enterprises submit detailed financial information.
Within seven days, the bank requested financial paperwork and other information from at least four virtual asset firms, including Kuna, CoinPay, Geo Pay, and Qmall.
Several Ukrainian telegraph news networks shared the story online, and it quickly went viral. According to the announcement, the NBU is requesting that businesses reveal trading data including operational volumes and the movement of all crypto assets.
Kuna’s CEO Michael Chobanyan verified the paper being shared, adding that the cause is fairly unclear. Kuna is a digital asset exchange in Ukraine that is subject to the new rule.
The current crackdown on crypto operations by the Ukrainian government has left many worried; CEOs in the digital asset industry have described it as “crippling.”
In 2023, businesses will need to file statements for all accounts, in addition to meeting financial standards. To add insult to injury, Chobanyan blamed the NBU’s “predatory actions” for the exchange’s decision to abandon its B2C strategy in the country.
According to Chobanyan, the government has conducted similar searches in the past in response to moves taken by the NBU and other regulators.
“In the past two weeks, the NBU, the Ministry of Internal Affairs, and the Security Service of Ukraine have started the first wave of searches in exchanges in Kyiv and across Ukraine. More inquiries and conversations will take place.
Where Do Businesses Draw the Line?
The expansion of Web 3 companies in Ukraine has been stymied by the government’s new regulatory rules.
After Kuna abandoned its business-customers approach, trading volumes plummeted. Chobanyan claims that trade volumes on the exchange have dropped by 90% in a matter of months.
You may recall that Kuna’s sales plunged by 60% in the first half of last year after the company departed Russia. The Ukrainian market has great potential, despite regulatory barriers.
Crystal Blockchain, a blockchain company, estimates that since Russia’s invasion, bitcoin donations to Ukraine have totaled up to $225 million.
Chobanyan said he sees the positives in the country’s current situation and that he has pushed the company to become a strong European brand rather than “a niche Ukrainian player.”
We’re putting all of our efforts towards the European market, particularly the business-to-business sector. I don’t know if they’re worried about us bringing this service to Ukraine or not.