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Ukraine’s Ministry of Digital Transformation, a major government authority behind local crypto regulation, will implement Bitfury’s cryptographic analysis tool to track crypto transactions.
As officially announced on July 23, the Ministry has signed an agreement with Birfury’s cryptographic compliance product known as Crystal.
Bitfury’s Crystal to provide crypto analytics expertise to the Ukrainian government
Launched by Bitfury in early 2018, Crystal is a software stack designed to combat crimes involving cryptocurrencies such as Bitcoin (BTC).
Crystal employees will now provide the ministry with cryptographic analysis expertise, Crystal explained on its website. Ministry executives will be trained to professionally monitor virtual asset transactions across the platform, Crystal said.
Ukraine wants to trace the origin of illicit transactions
According to the Ministry, the main purpose of the new collaboration is “the rapid formation and legalization of the virtual goods market in Ukraine”. By implementing Crystal’s analytics solutions, the Ukrainian government expects to verify the origin of illicit transactions, the official announcement notes.
Kyrylo Chykhradze, director of product at Crystal Blockchain, believes the cooperation will bring further mainstream adoption to the cryptocurrency industry. He said:
“The Crystal Blockchain team is delighted to assist the Ukrainian government as the country moves steadily towards further adoption of cryptocurrencies. We are proud to assist with the enforcement of anti-money laundering legislation in Ukraine.”
Crystal does not support privacy-focused coins
According to information on Crystal’s website, the platform supports a large number of cryptocurrencies such as 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 include major privacy-oriented coins like Zcash (ZEC) and Monero (XMR).
In the announcement, Crystal said 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 pointed out that the widespread adoption of cryptography 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 the adoption of virtual assets is largely dependent on institutional money and capital markets, which in turn require AML / KYC / KYT. […] In the eyes of some sections of cryptocurrency users, 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 secure transactional environment. “
Bitfury is one of the leading global blockchain companies
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 can manage online voting during Russian constitutional amendments in 2020.
At the beginning of July, the Ukrainian parliament registered a virtual goods bill, proposing legalization and suggesting a regulatory framework. In May 2020, the Ministry for Digital Transformation published the draft cryptocurrency law “On virtual assets”. As reported, the bill intends to determine the legal status of crypto assets in Ukraine.
