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Ukrainian Security Department And Law Enforcement Uncover a Crypto Mining Farm in a Railway Subdivision in Lviv

According to a report, Ukrzaliznytsia has uncovered a hidden cryptocurrency mining farm in the Lviv railway subdivision, which has been making use of the country’s electricity without paying for it. This secret mining company was discovered by Ukrzaliznytsia’s security department, in conjunction with law enforcement officials.

Oleg Nazaruk, Director of the Department of Economic and Information Security of Ukrzaliznytsia JSC, was the person that reported the news. He noted that more than 100 computers were found, and each of these computers could generate Bitcoin and utilized Ukraine power generation, which has resulted in a huge loss.

“During the inspection of the premises where the so-called farm was located, more than 100 pieces of computer equipment were identified that were generating bitcoins. The equipment mentioned above was connected to the Ukrzaliznytsia power grid. The estimated amount of losses since the beginning of the year is UAH 1 million,” he commented.

The report made reference to Ukraine’s law, which it claimed prohibited the issuing and circulation of cryptocurrency in Ukraine, making cryptocurrency-related activities illegal in the country.

The sample collected by the security agents that uncovered the mining company has been sent to the Ternopil Police Department of the Main Directorate of the National Police in Ternopil Oblast for verification.

Image via Shutterstock

Ukraine's Draft Bill on Digital Currencies Undergoes First Parliamentary Hearing

Ukraine’s push for the regulation of cryptocurrencies has successfully undergone its first hearing while it awaits the second and third hearing before it can evolve into a law.

Should the cryptocurrency regulation bill finally be passed by lawmakers, Ukraine will rank as one of the countries that have enacted laws that favor cryptocurrencies worldwide.

During the parliamentary hearing, some lawmakers expressed displeasure in the attention given to virtual assets. The lawmakers said there are more pressing matters that concern the Ukrainian economy that needs to be addressed. Even with this argument, the bill still moved to the next stage after it received 229 “yes” votes out of 340.

Although the law is leaning towards not considering virtual assets as a legal tender in Ukraine, digital assets that wish to be acknowledged in the market must have a backing affirming that it is either going to find use as a type of goods or services.

The cryptocurrencies will be monitored by Ukraine’s Ministry of Digital Transformation and any crypto service provider who intends to trade must register before access can be granted. Documents establishing their authenticity and originality as well as ownership structure and confidentiality of user information must be provided to increase customers’ security and trust once the bill eventually evolves into law.

Countries With Similar Moves on Crypto Laws

While the Ukrainian lawmakers are still deciding on the draft bill for digital currencies, the Swiss Parliament has launched a public consultation in a bid to finalize the proposed amendments of the extant laws in the country so as to promote the working conditions of cryptocurrencies and blockchain generally.

The State Duma of Russia also passed the Digital Financial Assets (DFA) bill which amongst other clauses decrees that every cryptocurrency transaction must follow a legalization process to reflect its transparency.

South Korea is not left out as its National Assembly has amended some of its Acts concerning cryptocurrencies and has fully legalized the use of cryptocurrency for transactions in South Korea. More countries are taking steps towards the adoption and legalization of cryptocurrencies and this is gaining more grounds for crypto recognition globally.

XLM Price Surges as Ukraine Selects Stellar Lumens for CBDC Development

Stellar network’s native token XLM has soared by approximately 30 percent in a day.

XLM has greatly gained in value, following the news that its blockchain network will be leveraged to develop central bank digital currencies (CBDC) in Ukraine. Together with the Ministry of Digital Transformation of Ukraine, the Stellar Development Foundation (SDF) will work on implementing and developing improved strategies for digital assets in the country.

It will further the development of the digital currency that the Central Bank of Ukraine is currently working on. Beginning this month, Stellar will begin working with the Ministry to provide Stellar-fueled tools to the digital payment system in Ukraine.

Ukraine’s Ministry of Digital Transformation is planning on using Stellar to launch its national digital currency. Additionally, Stellar Development Foundation will help Ukraine develop an infrastructure for stablecoins.

Stellar may see more partnerships in the future, as it offers decentralized, fast, and scalable payments network for cross-border payments, much like its counterpart Ripple. While Ripple has been defamed due to the Securities and Exchange Commission’s lawsuit for its associated token XRP, Stellar seems to be scooping up the competition, as it has seen bigger inflows in the recent weeks.

Stellar Lumens (XLM) price analysis

Source: TradingView

Despite the recent plummet of Ripple’s price due to the SEC regulatory news, XRP’s pal Stellar Lumens (XLM) surged by almost 90% since the start of the year. In the chart, you can see that XLM formed a falling wedge in the previous month, and has exhibited explosive growth after the breakout.

Since XLM’s all-time high is recorded at $0.51, it still has more potential to grow. However, the resistance sitting at $0.26 (which is also the top price of Nov 2018) may be a major obstacle for the coin to rise further.

Stellar Lumens is founded by Jed McCaleb, founder of Mt. Gox and co-founder of Ripple. It shares a similar concept and coding with Ripple. When Ripple suffers, it appears that Stellar Lumens gets all of its attention and takes off from the ground, with XLM currently rising past its previous high of late November.

Source: TradingView

Recently, XLM has been outperforming Bitcoin and it has the potential to do even better in the crypto bull market. XLM price continues to move in the ascending channel drawn in the above graph, and traders can look for a buying opportunity inside the channel. If the channel breaks, the blue line currently sitting at 0.00000511 BTC can provide a decent support for a further upside and can be viewed as an excellent buying opportunity.

Source: TradingView

If this happens, there may be a major market sell-off, and we can see whether 0.618 Fib. retracement level can provide a potentially nice entry for the coin.

Ukraine Plans to Pilot CBDC Digital Hryvnia for Salary Payments

Ukraine’s Ministry of Digital Transformation has announced plans to pay the national digital currency, central bank digital currency (CBDC), for its employees’ salaries.

In a recent interview with Ukraine media outlet TSN, Mykhailo Fedorov, minister of Digital Transformation, said his ministry plans to test out Ukraine’s CBDC, the digital hryvnia, implementing the electronic currency in employees’ salary payments.

Fedorov stated: “Frankly, as one of the first pilots, we have on the table the question of paying salaries to employees of the Ministry of Digital Transformation in electronic hryvnia.”

The minister stated that the effort to compensate its employees with CBDC would be possible once the sovereign digital currency is ready for testing.

Fedorov explained a need to test the CBDC to enhance its application and efficiency and therefore termed employee’s salary payments as a viable pilot scheme for the national digital currency.

Apart from compensating employees within the digital ministry with the digital hryvnia, the minister said that the pilot program would use the CBDC as a medium of payment for social benefits and government subsidies. However, Fedorov suggests that the initial rollout for the CBDC will focus on a small, controlled use case instead of being deployed for social payments.

The minister urges authorities to test the technology to collect user experience data and understand how it functions before applying the digital currency in the social sphere. Fedorov stated: “We are studying the experience of other countries that have launched pilots or are trying to introduce similar electronic currencies.”

Besides efforts to issue a CBDC, the Ukrainian government also plans to integrate smart contracts to limit the misuse of government grants.

The Rise Of CBDC

Using national digital currency to pay salaries of government employees is a popular pilot implementation strategy for national digital currency projects.

Some countries (such as Bahamas, Cambodia) that have already launched their CBDCs implemented the strategy of paying state workers in the digital currency during the pilot implementation phase.

In June, China, the pioneer in the CBDC space, tested its digital yuan in paying some of the government workers.

The Ukrainian government is moving forward with its CBDC plans. Early this year, the Ukrainian government tapped the Stellar Blockchain Network as a platform to build the national CBDC.

In January, Ukraine’s Ministry of Digital Transformation signed a memorandum of understanding with the Stellar Development Foundation to cooperate on several digital asset-related initiatives. Such projects involved helping Ukraine’s Central Bank in its CBDC efforts and assisting the country in developing infrastructure for modern virtual assets.

Ukraine Parliament Passes Legislation by Legalizing Crypto

The Ukrainian Parliament has passed a bill draft in the second reading Wednesday concerning legalising and regulating cryptocurrency and other virtual assets, such as tokens.

Approved by 276 lawmakers, the bill will take effect and become law after signing by President Volodymyr Zelensky, enabling the protection of virtual assets from fraud.

According to the official data, the daily turnover of virtual assets across the country accounts for $37000. The administration believes the legislation would make crypto safer and more legal to attract more investors to participate.

“Only a few countries in the world have legalised crypto assets — Germany, Luxembourg, Singapore. Ukraine will be one of them,” Mykhailo Fedorov, Ukraine’s Minister of Digital Transformation, said.

In Ukraine, virtual assets in Ukraine are not under the protection of local law. Residents are not allowed to use crypto as a way of payment or exchange goods or services, except the Hryvnia- the legal tender in Ukraine. According to the report, Ukrainians can only trade or conduct exchange crypto through local or Ukraine-registered foreign exchange platforms.

Experts argue that is a crucial milestone to Ukraine, as the bill has interpreted the definition of virtual assets “as intangible assets in the form of digital data”, also define the terminology, such as “wallet” for virtual currency or private key; but also allow the country to regulate the crypto market in the future.

To prevent money-laundering illegal activities, crypto businesses, which intend to register, need to declare their activities to the authority.

Local media, citing an official source, said the Kyiv government plans to open the crypto market for investors and the business sector next year when the tax code and the civil code is amended and ready.

Despite the current regulators, the administration prefers to introduce more watchdogs to issue permits for crypto businesses.

Ukraine intends to escalate the use of crypto across the whole country. Last month, the administration announced plans to pay salaries to workers by central bank digital currency.

Bitcoins Rebounds after Witnessing 6 Month Lows due to FUD, Standing around $36K

Subject to fears of a Russian invasion of Ukraine and the possibility of raising the interest rate, revealed by the U.S. Federal Reserve meeting last week, Bitcoin rebounded again after it tumbled to its lowest in six months during the Asia trading session.

After earlier dropping to $32,951, the largest cryptocurrency was last up 2.5% at $37,250 – its lowest price since July 23, 2021- as buyers stepped in to buy the digital currency, which took losses from its all-time high of $69,000 hit in last November past 50%.

According to Reuters, analysts said that further selling of Bitcoin could now reverse its long-term bull trend.

Meanwhile, rising tensions between Russia and Ukraine influenced the fall in Bitcoin earlier on Monday, while uncertainty over the Federal Reserve’s two-day policy meeting also intensified to the fall.

According to data from Coinglass, about $465 million in crypto were liquidated in the past 24 hours and Bitcoin trades accounted for $167 million of that total. On the other hand, Ether, the second-largest digital coin, was last down 3.5% at $2,451, after earlier reaching $2,160, its lowest level since July 27.

Fx Empire reported that through the second half of the day, Bitcoin bounced back to strike a day high of $37,469 before easing back.

Blockchain.News reported last week that Bitcoin dipped to its lowest level in more than five months as cryptocurrencies sank with risk aversion sweeping worldwide markets.

It was the second time this year that the world’s largest digital currency by market value has fallen below $40,000 hitting $38,642 mid-way through the Asia trading session.

Ukrainian Volunteer Groups Receive Bitcoin Donations amid Tension with Russia

The tension between Ukraine and Russia is getting intensified. To support the Ukrainian army with drones, medical supplies, and military gear, volunteer groups and NGOs are receiving Bitcoin donations, given that Russia has marshalled at least 100,000 troops to the border.

London-based blockchain analysis provider Elliptic report shows that these groups have received crypto donations worth hundreds of thousands of dollars to crowdfund war as tension with Russia escalates.

Part of the funds is being transferred towards creating a facial recognition application meant to identify a Russian spy or mercenary.

Despite Russia denying any plans to mount an attack, global powers are leaving no stone unturned as they seek to avert an all-out war between the two nations.

Over the past decade, volunteer groups have been at the forefront of aiding Ukraine’s conflicts, as witnessed in the ouster of pro-Russia President Viktor Yanukovych in 2014. These groups receive millions of dollars from private donors through payment apps and bank wires. Nevertheless, Bitcoin is emerging as a crucial alternative funding method.

Per the report:

“Elliptic has identified several cryptocurrency wallets used by these volunteer groups and NGOs, which have collectively received funds totalling just over $570,000 – much of it over the past year. Here we examine some of these groups.”

Source: Elliptic

On the other hand, Bitcoin donations have helped in noble causes, as recently witnessed in Tonga following a devastating volcanic eruption.

A BTC wallet set up by Lord Fusitu’a, a crypto advocate and Tongan politician, had received at least $40,000 just three days after going live meant to help in relief efforts.

Meanwhile, a group of Canadian truckers have switched their crowdfunding efforts to Bitcoin as their GoFundMe platform was shut down. Through the “Freedom Convoy 2022,” truckers protest vaccination measures.

Ukraine Legalizes Bitcoin amid Intensified Tension with Russia

Amid inevitable military potential conflicts escalating tension between Ukraine and Russia before the incoming full-blown war, the Ukrainian parliament unanimously voted to legalize Bitcoin and cryptocurrencies by passaging a Virtual Assets law on Feb 17.

The legislation called “Law of Ukraine on Virtual Assets” has been passed with at least 270 votes approval, according to a statement from the Parliament.

The law stipulates the requirements that crypto service providers like exchanges ought to adhere to and the accrued fines in case of violations.

Mykhailo Fedorov, the Ukrainian deputy prime minister, believed that the law would open the nation’s boundaries to crypto companies, given that Ukraine is among the top-5 countries in crypto usage. He noted:

“The new law is an additional opportunity for business development in our country. Foreign and Ukrainian crypto companies will be able to operate legally, and Ukrainians will have convenient and secure access to the global market for virtual assets.”

However, the passage of the bill does not mean the legalization of the adoption with Bitcoin as legal tender. According to Nasdaq.com, citing a report from Bitcoin Magazine, the nation’s financial watchdog, the Securities Commission, will monitor the crypto market and issue permits to service providers.

The passage of the virtual assets law is the country’s second attempt to legalize Bitcoin after the first effort reached a dead end following President Volodymyr Zelensky’s rejection.

The legalization of Bitcoin in the nation comes at a crucial time when tensions with Russia have intensified, given that Russia has marshalled more than 100,000 troops to the border, although Russian claims that have withdrawn some of the troops from the borders.

On the other hand, U.S. President Joe Biden recently noted that Russia was ready to fabricate reasons to invade Ukraine, warning that an attack would emerge in the coming days.

Therefore, volunteer groups and NGOs in Ukraine have been receiving Bitcoin donations to support the army with drones, medical supplies, and military gear.

Short-Term Holders Dominate Primary Driver for Bitcoin's Liquidation amid Ukraine Crisis

Bitcoin (BTC) continues to be in the red following its slip below the psychological price of $40,000, a scenario not seen in the last two weeks.

The leading cryptocurrency was down by 6.38% in the last 24 hours to hit $36,732 during intraday trading, according to CoinMarketCap.

Analysis by IntoTheBlock shows that short-term holders have been the primary catalysts of the present leg down as they continue liquidating their BTC investments. The market insight provider explained:

“Short-term holders continue to be the main driver of BTC volatility. While long-term holders remain unfazed, the balance held by traders – addresses less than 1 month, are moving almost in tandem with the price action. Since Feb 14, they decreased their holdings by 8.7% to 1.55m BTC.”

Source: IntoTheBlock

Some of the factors that might have triggered short-term holders to be on a selling spree entail the Ukraine-Russia tension, given that a full-blown war between the two nations seems likely.

Things have gotten worse given that Russian President Vladimir Putin signed a decree recognizing two breakaway regions of eastern Ukraine as independent entities. Previously, Ukraine legalized Bitcoin because it plays an instrumental role in aiding donation efforts needed to boost its army.

On the other hand, low BTC network activity triggers the current drawdown because of slashed demand. Economist Jan Wustenfeld stated:

“While the supply of Bitcoin is becoming more illiquid, which is good, network activity remains relatively low and partially even decreases further. Considering the total on-chain transaction value of $BTC since mid-2021 it has been low.”

Source: Jan Wustenfeld

Therefore, BTC demand should be rejuvenated so that the leading cryptocurrency can be back to winning ways.

Crypto Market Crashes after Putin Announcing Military Operations against Ukraine

The cryptocurrency market is full of bearish sentiment right after Russia launched the latest military operations against Ukraine.

Bitcoin, the leading cryptocurrency, plunged over 7.8%, trading at around $34.7K during the Asian trading session, according to CoinMarketCap.

The downtrend of bitcoin has similarly affected other leading cryptocurrencies such as Ethereum (ETH), Binance coin (BNB), ripple (XRP) and Cardano (ADA).

Ethereum, the second-largest cryptocurrency by market capitalisation, also fell over 9.5 % over the last 24 hours, trading at around $2376 at present.

Russian President Vladimir Putin announced a “military operation” targeting Eastern Ukraine’s Donbas region on Thursday local time, and requesting Kyiv forces to surrender, according to Reuters and the Financial Times. Reportedly, explosions were heard in Kyiv, the capital of Ukraine, as well. Joe Biden, President of the U.S., denounced Russian attacks, claiming “will hold Russia accountable”.

Anto Paroian, Chief Operating Officer at digital asset investment fund ARK36, told Blockchain.News that “the war between Russia and Ukraine has become a reality,” adding that investors are rushing to take risks off the table, and global stock markets are seeing major declines. Given how closely the crypto markets have been correlated with risk assets over the past two months, Paroian commented that it doesn’t come as a surprise that the situation is aggressively spilling into the crypto markets with Bitcoin losing more than 8% in a day:

“It is tempting to think that Bitcoin and other crypto-assets may count on some relief from central banks in the form of a more dovish approach to rate hikes and quantitative tightening. The rationale behind it would be that the economy will now become too fragile to be taken off central banks’ support just yet.”

Paroian also pointed out that the current geopolitical situation “will inevitably have an effect on the already elevated prices in the commodities market and aggravate the already-serious supply chain issues which, in turn, could elevate inflation.” That means that the Fed and other central banks may really “have no room to reverse their hawkish course and we can expect risk assets and cryptocurrencies to go deeper into the bear market territory,” he added.

Likewise, according to online media Outlook, citing Gaurav Dahake, CEO and founder, Bitbns, also said “geopolitical pressure and a potential war breaking out have elevated the volatility levels in the markets. Overall, the momentum signals and upside seem to be limited,”

Prior to the full-scale invasion, Ukraine has approved legalising Bitcoin domestically recently. Some organisations reportedly have been receiving crypto donations to aid military support.

The U.S. announced to impose a new round of sanctions on Russia on Monday, in response to Russian recognition of the sovereignty to two separatist territories- the Donbas and Lugansk region. Analysts said Russia might turn to crypto due to the latest round of sanctions from the U.S. Meanwhile, Russian authorities considered offering the green light to crypto regulation.

The tension between Russia and Ukraine has affected the recovery of bitcoin. Bitcoin’s price had once gained momentum after the sanction from the U.S., but it seems to take a longer time to resume.

— With assistance by Aaron Limbu