Russian and Ukrainian banks are taking measures to limit the flow of crypto funds overseas, with central banks concerned about limiting private citizens’ ability to conduct crypto-related cross-border transactions through banks.
Ukrainian commercial bank PrivatBank has “temporarily banned its clients from transferring” fiat hryvnia holdings to crypto exchanges, according to Forklog’s Ukraine service, citing a decision from the central National Bank of Ukraine.
While Ukraine is still under martial law, the blockade will remain in place. According to an official at PrivatBank:
Cross-border transfers involving currency values from Ukraine are not permitted by banks on behalf of their customers. It is not an exception [to this rule] to transfer funds to be used on crypto exchanges.”
Most crypto-fiat trading services will not be interrupted, according to WhiteBIT and Kuna, both of which told the same media outlet:
Those restrictions on cross-border transactions are understandable. We have nothing to do with this situation. Deposits and withdrawals of hryvnia can be made to and from Kuna. As a result, “everything will run as usual.”
PrivatBank claimed that it had “not notified” Binance about the “blocking hryvnia input,” but Binance denied this. However, the exchange noted that “problems with such transactions” had been reported by some users.
Cryptocurrency is now on the list of assets Russia’s Central Bank wants banks to block citizens and organizations from sending to countries on “unfriendly terms” with Russia, according to Russian media.
According to Vedomosti, the Central Bank’s Deputy Chairman, Yuri Isaev, wrote a letter on the subject on March 16th. Three people with knowledge of the situation were said to have verified the letter’s authenticity, according to the news source.
He wrote that banks had been urged “to monitor the financial transactions of both individuals and legal entities,” with special attention given to “attempts to withdraw assets by organizations that are residents of countries unfriendly toward Russia.”
The 48 countries on this “unfriendly” list include the United States, the United Kingdom, and the European Union.
Customers should be on high alert for any unusual behavior, as reported by the Central Bank of Russia. To report “any abnormal activity in transactions,” as well as “changes like expenses, including investments,” banks were allegedly told by the FDIC.
The head of the Central Bank allegedly wrote that attempts to withdraw funds abroad and transactions involving “digital currency” should be given special attention.
“All attempts to circumvent the restrictions” of the Central Bank “must be stopped,” according to the banks, according to the information available.” “Blocking suspicious payments if necessary,” it recommended.
Isaev is said to have warned banks about sudden “increases in [transaction] volumes that are not typical of private consumption.” This could be a “purchase of goods” that is meant to be resold, later on, he warned.
Rosfinmonitoring, an anti-money laundering agency, was reportedly ordered to receive reports from banks about suspicious transactions.
Companies and individuals in the “unfriendly” list are prohibited from being purchased by Russians and Russian businesses unless they receive prior permission from the authorities.