As officially announced on July 23, the Ministry has signed an agreement with Birfury’s crypto compliance product known as Crystal.
Bitfury’s Crystal to provide crypto analytics expertise to the Ukraininan government
Crystal employees will now provide the Ministry with crypto analytics expertise, Crystal elaborated on its website. The executives at the Ministry will be trained to professionally monitor virtual asset transactions through the platform, Crystal said.
Ukraine wants to track the source of illicit transactions
According to the Ministry, the main purpose of the new collaboration is the “rapid formation and legalization of the market of virtual assets in Ukraine.” By implementing Crystal’s analytics solutions, Ukraine’s government expects to verify the source of illicit transactions, the official announcement notes.
Kyrylo Chykhradze, director of product at Crystal Blockchain, believes that the cooperation will bring further mainstream adoption to the crypto industry. He said:
“The Crystal Blockchain team is delighted to assist the Ukrainian government as the country steadily moves towards further crypto adoption. We are proud to assist with the application of AML legislation in Ukraine.”
Crystal does not support privacy-focused coins
According to information on Crystal’s website, the platform supports a wide number cryptocurrencies like Bitcoin (BTC), Ether (ETH), Tether (USDT), XRP, Bitcoin Cash (BCH) as well as ERC-20 and ERC-721, or the so-called non-fungible tokens, or NFTs. The system apparently does not feature major privacy-oriented coins like Zcash (ZEC) and Monero (XMR).
In the announcement, Crystal said that its software is used by a number of Ukrainian banks, private and government agencies to monitor financial transactions. Chykhradze told Cointelegraph that the names of Crystal's partners cannot be disclosed so far.
The executive also outlined that the widespread adoption of crypto requires an “artificial limitation for privacy.” Noting that Crystal is planning to introduce privacy coins in the future, Chykhradze said:
“Historically, we can see that virtual asset adoption depends quite a bit on institutional money and the capital markets, who require in turn, AML/KYC/KYT [...] In the eyes of certain sections of cryptocurrency adopters this creates an artificial limitation for privacy. However, we shouldn’t forget that bitcoin was created as a traceable asset, so by revealing its transparency to all users, we can create a truly safe transactional environment.”
Bitfury is a major global blockchain company
Crystal Blockchain’s parent company, Bitfury, is one of the largest blockchain companies in the world. Bitfury is known for providing blockchain technology to Russian authorities so that they could handle online voting during the Russian constitutional amendments in 2020.
Earlier in July, Ukraine’s parliament registered a bill on virtual assets, proposing the legalization and suggesting a regulatory framework. In May 2020, the Ministry for Digital Transformation published crypto draft law “On Virtual Assets.” As reported, the draft bill intends to determine the legal status of crypto assets in Ukraine.