Serhii Sotnychenko, an expert in the cryptocurrency and financial sector of Ukraine, expresses his position regarding violations of the law by participants in the cryptocurrency market.
Serhii Oleksandrovych, you previously said that 75% of criminal cases related to the financial cryptosector are misclassified, while the remaining 25% are articles-specific cases. Tell me, which ones did you mean?
We are talking about the transfer of funds from non-controlled regions, as well as from the aggressor country — Russia.
Tell us what actions are being taken and how they are dangerous for Ukraine?
Basically, this is the transfer of funds using cryptocurrency from the occupied territories of the LPR and DNR, as well as from the Russian Federation.
It looks like this: for example, I need to transfer funds from the “LPR”, I find someone who organizes the transfer of cash, ask to pick it up in the occupied territories, and then give it out, for example, in Kyiv, right? What happens next?
The first and most important point is how did you get the funds there? Since 2014, a war has been going on in Ukraine on those territories, primarily with the Russian Federation. Also, the activities described in your question fall under the activities classified as “terrorist financing”.
Now let’s move on to the mechanics of what those willing to finance terrorism will do. They tell where to give cash to such a willing person in those places and tell how to get it here.
Photo: Serhiy Sotnychenko, expert in the cryptocurrency and financial sector of Ukraine
How is cash transferred from there to here? After all, hostilities are ongoing along the entire front line and they cannot be smuggled?
Everything is simple – they buy back cryptocurrency for cash (there are also such places of sale there), enter the cryptocurrency market of Ukraine and sell this cryptocurrency. And the received cash is given to people who have turned to them.
Well, how is the term “terrorist financing” related here? After all, those who need to issue cash cannot always be representatives of the DRG, FSB, GRU or Wagner’s PMC. If, for example, a person does not want to live in those territories because of patriotism and has sold a house there, he needs funds in Kyiv, since he moved here to live. After all, we have many residents from Donetsk or Luhansk.
The fact is that those “unclean” people who help organize the prohibited operation violate the law that prohibits the transfer of funds from the occupied territories. According to statistics, 98% of funds from those territories go to, you know, what…
Please explain, readers will be interested.
The cash transferred to someone in Ukraine from the LPR, DPR, and Russia, which is not controlled by it, is currently being used under the guise of “sold a house and so on”: to rent apartments (to someone and for something); to bribe officials; for information or for not seeing something somewhere; for the purchase of vehicles for further acts of a terrorist nature (no one knows how many actually every day our valiant law enforcement agencies find parked vehicles with loaded explosive devices). The funds are also used to pay for some actions, contract killings and many other things that should lead to an imbalance or weakening of the state internally.
The list is really strict. Recently, an article was published about how residents of Kyiv who put up banners around the city in residential and central areas were detained.
That’s exactly how it is. Our enemy has a colossal financial resource, which he unleashes on the internal activity of the DRG, with the main motive – to weaken the security within our state, thereby weakening the motivation of those who are in the cities, as well as the defenders who are fighting on the front lines. But they have families, children who live in our cities of Ukraine.
The enemy stops at nothing, he is unprincipled and used almost all methods of waging war on our territory. By the nature of the task of strikes on civilian objects, we can see that neither the lives of children nor the lives of women play a role for him.
It turns out that many cryptocurrency associations on the market of Ukraine today can contribute to the enemy. Right?
Yes, absolutely. But there is a small clarification – very often it happens unconsciously. As I already said, the cryptocurrency market is very important for the state. He is young now, he still has a long way to go. And the most important thing here is a clear awareness of the actions and their consequences for the citizens of Ukraine and for the security of the state in general. And also the opportunity to earn, but not to lose personnel of the IT sector, since this is the most highly paid and sought-after market today.
Photo: Serhiy Sotnychenko, expert in the cryptocurrency and financial sector of Ukraine
What do you mean by “not always aware” in the context of crypto actors?
Let me give you a banal example — Petya Batareykin buys and sells cryptocurrency. His acquaintance Vasya has self-interested thoughts and unscrupulous views on relations after the occupation of territories, and also has information on where to buy cryptocurrency, for example, from “DNR”. The same Vasya finds those who need money in Kyiv and carries out a purchase operation for cash from “DNR”. If you unravel this tangle, it turns out: Vasya, who violates the law and is an unprincipled and unscrupulous scoundrel, and those who needed to transfer funds here, are 95% representatives of the DRG, and Petya Batareykin, who bought cryptocurrency sold in Ukraine, is not at all understood its origin. In order to understand the origin, the concept of a whole complex of technical means, measures and comparison of the base of the array of information is needed.
What happens next?
Next, a person who intends to undermine state security or a person who plans to transfer funds from the occupied territories is revealed, detained and a chain of events is established.
What bodies of our country carry out detention and investigation?
GUR MO, SBU DKIB, SBU Military counterintelligence — these services can be singled out in solving such issues. The guys work very well, in a coordinated manner, with the use of special tools and other things. Everything that has been worked on for years.
And how does this threaten the persons who, in this case, simply purchased cryptocurrency and did not know the intentions of the actors?
Threatens to become participants in the criminal process. And this is a rather unpleasant measure. You yourself understand that wartime and such cases have a high level of threat to the state and citizens of Ukraine. Services are not celebrated in such cases with participants. Only then, after long explanations and proofs, does a virtuous person seek justice.
And I would also like to hear your opinion on how to maintain a balance in this market in the current realities?
As I have already stated in separate articles, these cases should be prevented not only by the complexes of law enforcement measures, but also by the actors of the financial crypto-currency sector. As experts, we advocate joint work on these issues.
In my opinion, it is necessary to create a public council of representatives of the crypto/financial sector, which should include all representatives of large networks (exchange points, crypto associations) under the President of Ukraine or the Verkhovna Rada of Ukraine. The Security Service of Ukraine should familiarize everyone with the created regulations, what should be paid attention to when working with clients. Implement, at least for the period of martial law, a set of systems and rules for checking counterparties so that it is possible to quickly receive information about those who, according to some criteria, fall into the special risk group.
Something like this, where the people who entered this public council and agreed to the rules will follow them, setting an example for other companies and associations. Right now we are preparing something similar for the market. Only by joint efforts will we be able to free the hands of structures responsible for state security.
This approach, in my opinion, will allow the security forces not to run around everything they will seize and open during the events, but will work in a targeted manner, increasing the effectiveness of the fight against the enemy on our territory.
