Bitcoin is a global digital currency which empowers its users to do virtually anything they can think of. Sending money to anyone else in the world at low fees? Check. Paying online bills without using your bank account in certain countries? Check. Giving the power that be back to the people? Check. Funding separatist actions in Ukraine? Apparently so.
Ukraine Government To “Block” Various Payment Methods, Including Bitcoin
Valentyn Nalyvaychenko, head of Ukraine’s Security Service (SBU), had not made any friends earlier today when he mentioned that certain Bitcoin-related bank accounts will be closed. Or to be more precise, Mr. Nalyvaychenko feels that Bitcoin is being used to fund actions executed by Ukrainian separatists against the government and residents of Ukraine.
The main focus will be restricting the usability of bank and credit cards used by separatists, as well as closely monitoring any and all activity relating to their bank account. However, Bitcoin activity is also being scrutinized, as this disruptive digital currency provides separatists with an alternative way of funding their actions.
Up until this point, it remains unclear as to how the SBU and the Ministry of Home Affairs will tackle the issue of monitoring and freezing funds belonging to Ukrainian separatists, especially in regards to Bitcoin-related activities, seeing how these transfers are usually performed in a semi-anonymous way [until converting them into fiat currency that is].
Ukrainian Bitcoin Exchanges Temporarily Unavailable
Ukraine has a handful of different Bitcoin exchanges, of which BTCTrade.com.ua is the largest. Shortly after the announcement made by Mr. Nalyvaychenko, BTCTrade.com.ua become inaccessible to Ukrainian citizens. This was later confirmed by the exchanges official Twitter account by stating that they were ‘experiencing issues due to Privatbank’. Payouts are temporarily suspended, and no ETA has been provided as to when services will resume.
Note from the Author: Privatbank is Ukraine’s largest commercial bank.
Needless to say, this entire situation is putting a lot of pressure on Bitcoin and digital currencies as they are once again associated with [domestic] terrorism and the funding of “illegal” activities against governments. Ukraine had been making headlines in the past few years when separatists conducted operations in Lugansk and Donetsk.
Furthermore, moving fiat currency into Ukraine is not an easy feat these days. Paypal, one of the world’s most popular payment services, only allows for money transfers from Ukrainian accounts to other countries, but sending money to a Ukrainian account is not possible at this time. International bank transfers will still go through, but every transfer is being monitored and can take up to several days or weeks to clear.