A recent raid of a bitcoin mining farm in a state-owned, empty swimming pool in Ukraine raises questions about the legality of the cryptocurrency in the country. Following the event, the Ukrainian central bank promptly published a statement about bitcoin’s regulation and legal status.
Also read: 150 Bitcoin ATMs Coming to Ukraine
Mining Farm Raided; Miners Arrested
Ukraine’s National Police arrested several suspects for illegally mining bitcoins last week, according to local publications. 200 computers were set up to mine the cryptocurrency in an unused swimming pool at a state-owned recreational center of the Paton Electric Welding Institute, which is located in Kiev, the capital and largest city of Ukraine.
The arrests followed Kiev’s Svyatoshinsky District Court’s rulings last week which found that bitcoins were illegally mined, along with several other violations of Ukrainian laws. The court, therefore, gave permission to the Security Service of Ukraine (SBU) to search and seize items and documents related to the mining operation, according to Inshe.tv.
The court found that the suspects had no right to use the swimming pool which is located on state-owned premises. They also breached the law of the National Bank of Ukraine (NBU) “by emitting ‘substitute money’ and forging documents to launder it,” the Kyivpost detailed.
Questions about Bitcoin Legality
According to the NBU, which is the Ukrainian central bank, “there is only one national currency, the hryvnia, and no other currency or substitute currency can be issued or used as a form of payment in Ukraine,” the Kyivpost conveyed. However, the law does not specify what a “substitute currency” is, the publication noted.
Back in 2014, the NBU warned about bitcoin and its use in the Ukraine. The National Bank considers the cryptocurrency “a money surrogate, which has no real value and cannot be used by individuals and legal entities within the territory of Ukraine as a means of payment, as it contradicts the norms of Ukrainian legislation.”
However, lawyers were interviewed by Inshe.tv on the subject and they all agree that cryptocurrency mining in Ukraine is not illegal. Artem Afyan, a managing partner of the Yuskutum law firm said “engaging in mining in Ukraine is absolutely legal,” adding that:
The arguments of the National Bank that the cryptocurrency is an unsecured ‘money surrogate’ are only a warning. It does not mean prohibition of their use.
Central Bank’s Response
A day after the Kiev mining farm news surfaced, the NBU issued a statement, reiterating that “currently bitcoin does not have a definite legal status in Ukraine.” The central bank also noted that “the definition of such a status in Ukraine is complicated by the lack of a consolidated approach to the classification and management of bitcoin in the world,” adding that:
In different countries, bitcoin is classified in different ways – as virtual currency, money surrogate, intangible value, virtual goods and the like. For its part, the NBU has not officially supported any of the above definitions.
Meanwhile, the NBU has started discussing the legal status of bitcoin and its regulation with other relevant government bodies such as the ministry of finance. “This issue will be considered at the next meeting of the Financial Stability Board, which is scheduled to be held before the end of August,” the central bank declared.
What do you think the National Bank of Ukraine will do about bitcoin? Let us know in the comments section below.
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