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Arrests of Bitcoin Miners in Ukraine Spark Questions About Legality

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Mining Farm Raided; Miners Arrested

Ukraine's National Police arrested several suspects for illegally mining bitcoins last week, according to local publications. 200 computers were set up to mine the cryptocurrency in an unused swimming pool at a state-owned recreational center of the Paton Electric Welding Institute, which is located in Kiev, the capital and largest city of Ukraine.

The arrests followed Kiev's Svyatoshinsky District Court's rulings last week which found that bitcoins were illegally mined, along with several other violations of Ukrainian laws. The court, therefore, gave permission to the Security Service of Ukraine (SBU) to search and seize items and documents related to the mining operation, according to Inshe.tv.

The court found that the suspects had no right to use the swimming pool which is located on state-owned premises. They also breached the law of the National Bank of Ukraine (NBU) "by emitting 'substitute money' and forging documents to launder it," the Kyivpost detailed.

Questions about Bitcoin Legality

According to the NBU, which is the Ukrainian central bank, "there is only one national currency, the hryvnia, and no other currency or substitute currency can be issued or used as a form of payment in Ukraine," the Kyivpost conveyed. However, the law does not specify what a "substitute currency" is, the publication noted.

Back in 2014, the NBU warned about bitcoin and its use in the Ukraine. The National Bank considers the cryptocurrency "a money surrogate, which has no real value and cannot be used by individuals and legal entities within the territory of Ukraine as a means of payment, as it contradicts the norms of Ukrainian legislation."

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