Ukraine 'to Crackdown on Separatist Bitcoin Accounts'

The Ukrainian government is planning to block bitcoin accounts used by separatists operating in the Eastern regions of Lugansk and Donetsk, reports suggest.

Valentyn Nalyvaychenko, the chairman of Ukraine's security service (SBU) told iPress that the crackdown would also focus on card and bank accounts.

Nalyvaychenko noted:

"The financing of terrorism in the territory of Ukraine is carried out not only by the cash coming from Russia, but also through attempts to make money through electronic systems [...] we will work to block cards and bitcoin accounts being used by the separatists."

The chairman did not explain how the security service was planning to block the accounts.

In the meantime, Reddit users have fuelled speculation that Ukranian exchange website BTCTrade.com.ua may be inaccessible to domestic Internet users.

Confirmation, which has been loosely translated, came via Twitter: "We are under suspicion by Privatbank. We apologise for temporarily suspending payouts in Hryvnia."

#приватбанк заподозрил нас в чем-то, приносим всем извинения, временно выплаты гривны приостоновленны...





— btc_trade_ua (@btc_trade_ua) March 19, 2015

Privatbank

is the largest commercial bank in the Ukraine.

The SBU defines itself as a special-purpose law-enforcement agency, and serves as the country's main agency in the areas of counterintelligence activity and combatting terrorism.

Ukraine's cash crisis

Despite claims that bitcoin has been used to fund terrorist activity in Eastern Ukraine, the digital currency has also played a role in the aftermath of Kiev's protests.

After President Viktor Yanukovych's removal from office and the subsequent eruption of violent demonstrations across the country, people rallied to campaign for funds.

Sending money to Ukraine, however, was not an easy feat. PayPal would only allow money to be sent out of the country, while international bank transfers could take days to clear.

Photos of protesters holding campaign signs to raise funds directly via bitcoin in Kiev's central square began to surface online. The insurgents were holding up QR codes, as part of a co-ordinated effort to collect instantaneous donations from everywhere in the world.

At press time, BTCTrade.com.ua and SBU had not responded to requests for comment.

Image via Shutterstock.