Ukraine has passed a new bill on Financial Monitoring to combat money laundering. With the need to combat “dirty money” increasing, the country’s Parliament approved the Financial Monitoring Bill on Dec. 6. 2019, which has been in the works for several years.
The law will go into effect on April 28, 2020.
Choosing a European integration path, Ukraine’s Finance Minister Oksana Serhiyivna Markarovs clarifies in an interview that as per the updated law, operations with virtual assets are now subject to financial monitoring in the country.
This involves companies that deal in activities related to cryptocurrencies including exchanges, storage, sale, and transfer of electronic money. If these companies process cryptocurrency payments worth more than UAH 30,000 ($1,228), they must verify such a transaction and collect detailed customer information.
The customer involved in such transaction would also have to provide comprehensive information on the origin and the destination of their digital currencies.
In case any suspicious activity is suspected, it should be reported to the State Financial Monitoring Service (SCFM).
All of these steps will ensure that these funds are not received illegally, said Serhiyivna Markarovs.
She also shared that SCFM has access to an analytical product that allows investigation into the origins of crypto-assets and their uses. Although it is impossible to stop operations, she said it is possible to block crypto wallets and remove illegally obtained crypto assets.
Legalization of Cryptocurrencies in Ukraine
Serhiyivna Markarovs says they have introduced cryptos in the law on financial monitoring and have started the process of implementing them as per the European directives and recommendations of the FATF.
Ukraine has also set up an Interagency Working Group under the VRU Digital Transformation Commission to develop a special law on regulating the virtual assets over the next four months.
The finance minister says the purpose of financial monitoring is to prevent money laundering but believes that “our criminals and corrupt officials are quite conservative and still keep the funds mostly in cash.”
As such, she sees the legalization of cryptocurrencies, whose volume in Ukraine is at a high enough level, as an opportunity for the development of the industry instead of a threat.
Meanwhile, in South Africa, another Bank might close Crypto Accounts
While Ukraine is working towards regulating cryptos and encouraging its development, South Africa is taking the opposite approach.
Big four bank Nedbank may become the second financial institution after the First National Bank to close the crypto bank accounts, local media reports. Last year in Nov. FNB said it would close accounts for crypto exchanges this year, citing the regulatory risks presented by the digital currencies.
Local crypto exchanges however, say they have not been informed of any such development. Meanwhile, the bank says, “Nedbank is in the process of assessing its position in respect of virtual currency dealers/traders.”
The bank is currently assessing its position regarding cryptocurrencies and the word around the industry is they may not be onboarding crypto-related business in the future.
Crypto exchange AltCoinTrader CEO Richard De Sousa says, “There may also be international pressure contributing to the closure of accounts as banks may want to slow down the adoption so they can get on board.”
When FNB closed down accounts last year, reports emerged at that time that FNB had been pressured by JPMorgan, its “correspondent bank,” to do that.
Industry people say banks don’t have a good understanding of crypto and it’s still a very new industry. They expect FNB to reverse its decision in the foreseeable future and that in the next few years, “all banks will offer crypto-currencies to their customers, without exception.”
