SBU seizes 800 kg of silver from a Bitcoin exchange. Suspects’ business partner decries lawlessness.

The Security Service of Ukraine (SBU) reported on the uncovering of a gang allegedly involved in money laundering and illicit transfer of funds, including via cryptocurrencies.

According to law enforcement, the exchange operators, via websites and Telegram channels, enabled converting cryptocurrency into cash in especially large amounts in breach of virtually all legal procedures.

According to investigators, the exchange conducted transactions worth about 240 million hryvnias, more than 65 million of which were linked to money laundering. The SBU is examining information about possible support for the suspects by the “DPR” and “LPR”.

During searches in Kyiv and Kharkiv, the agency’s officers seized more than 43 million hryvnias, 800 kg of silver in bank bars, equipment and documents.

The organizers are suspected of fraud and money laundering of proceeds derived from crime.

Even before the SBU, information-security specialist and HackControl CEO Nikita Knysh told ForkLog that this is the same exchange described by the SBU. He confirmed to ForkLog that this is the same exchange referred to by the SBU.

“This concerns a cryptocurrency and offline exchange owned by my clients, with whom I am partners in another business. And I personally trusted them to store part of my money,” — explained Knysh.

According to him, law enforcement had already conducted searches at representatives of the exchange:

“And if the same exchange in the city of Kharkiv at Prospekt Konstitutsii, 26 has already been searched four times under the same fake pretexts by the SBU, the Prosecutor General’s Office, the State Fiscal Service, and the police, and each time returned absolutely all seized property because nothing could be proven in court, then I think it’s high time to demand compensation.”

Knysh regards the charges of fraud and money laundering as unfounded.

He noted that the bulk of the assets seized during the searches were taken from bank safe-deposit boxes and the apartments of his business partners, “silver bars minted by the National Bank of Ukraine, used to hedge against volatility in cryptocurrency prices.”

“Think about who stores the ‘laundered’ (according to the investigation) money in a bank safe under their real name? I think only those who know for sure that the money is legal,” wrote Knysh.

He also noted that on March 22 the President of Ukraine signed the law creating the Bureau of Economic Security. Under it, the SBU would lose “functions not inherent to the security services” in investigating corruption and crime in the realm of governance and the economy.

“SBU officers appeared to interpret this law a little differently — as a ‘team to loot as if for the last time, because we are about to be abolished.’ And they sent Telegram messages to all regions so that all regional KZE SBU units would focus on ‘fighting’ cryptocurrencies and ordinary exchanges,” — wrote Knysh.

ForkLog contacted the SBU for comment but did not receive an immediate response.

In 2017, SBU officers seized equipment from ForkLog’s office and cryptocurrencies from ForkLog founder Anatoliy Kaplan. A court later lifted the seizure of the seized equipment.

Law enforcement did not press charges, but a substantial portion of the property was never returned.

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