Why Did Ukraine’s Central Bank Request Financial Reports From Four Crypto Firms?

The Ukrainian government has taken an unprecedented step toward ensuring transparency in the crypto sector through the country’s central bank. Accordingly, the government has requested certain financial information from some of the crypto trading platforms in the country.

Central Bank Seeks Company’s Financials

Recently, the National Bank of Ukraine (NBU), the country’s apex bank, made a demand from four prominent local cryptocurrency firms. The central bank asked these companies, namely, CoinPay, GEO Pay, Kuna, and Qmall, to provide their financial statements for the first two quarters of 2023.

Additionally, the NBU set a strict deadline of seven days for these crypto businesses to comply and provide the requested financial data. The latest action demonstrates the NBU’s keen interest in understanding the economic dynamics of the country’s crypto sector.

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In a recent interview, Michael Chobanyan, the CEO of Kuna Exchange, shared further insights. He confirmed the NBU’s latest demand, citing a document distributed via the Ukrainian Telegram news network, Politics of the Country.

In the document, the NBU revealed more details about its demand, stating that it is taking a thorough approach toward supervising the operations of local cryptocurrency firms. Accordingly, the financial regulator has required these crypto businesses to provide data on their operating volumes and financial statements for the first two quarters of 2023.

Furthermore, the NBU’s request includes information about the crypto firms’ receipt and funds transfer. By analyzing such data, the regulator intends to gain insights into the flow of funds within the cryptocurrency market, which will boost its regulatory efforts.

After confirming the NBU’s request, Kuna’s CEO expressed skepticism about the NBU’s latest action, implying that the motivations behind the move are unknown. However, he didn’t state whether his firm would comply with the directive.

Chobanyan only stated that it is the first time the apex bank will request such information in the history of crypto firms’ operations in the country. He added that he researched the last eight years (before Kuna started operations) to determine whether there have been similar requests but found none.

As a result, he questions the NBU’s motives behind the latest actions. The Kuna CEO stated that Kuna Exchange had halted its operations since March 2023 following regulatory crackdowns.

Hope Amid Uncertainty

Furthermore, Chobanyan expressed concern that the government’s relentless scrutiny of the nation’s crypto industry is negatively impacting the country’s crypto and Web3 space. According to him, the exchange volume of Kuna has decreased by 90% in recent months.

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Kuna suffered a setback after exiting the Russian market on February 24, 2022, due to regulatory irregularities, losing approximately 60% of its user activities. Despite Ukrainian authorities’ growing hostility toward the crypto industry, Chobanyan remains optimistic that the authorities’ recent actions will benefit the fast-growing crypto industry.

However, he hinted that Kuna’s new focus would be expanding into Europe, particularly the thriving business-to-business market. One of the firm’s products, KunaPay, would be pivotal in Kuna’s expansion strategy.

KunaPay is an innovative platform that facilitates financial settlement using crypto. Meanwhile, Chobanyan speculates that the NBU’s recent actions may be related to concerns about the launch of KunaPay in the country’s finance ecosystem.

Author: Owen Clark

Owen Clark, a seasoned crypto newsman and broker, deciphers the intricacies of the digital currency realm, empowering investors with his astute analysis and actionable insights.

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