Law enforcement officials in Minsk are seeking international help to locate and detain the man who ran what is believed to be the largest online cryptocurrency exchange in Belarus. The crypto-trader was accused of tax evasion and an investigation against three of his accomplices estimated the losses for the state at $3.5 million.
Belarusian operator of Bitok.me is now wanted internationally for tax offenses
Belarusian authorities recently completed a criminal investigation against three residents of the town of Lida, who helped the owner of an illegal crypto exchange platform to dodge taxation. Vladislav Kuchinsky, who ran Bitok.me (formerly Bitok.by) for two years, has been charged with “tax evasion on a particularly large scale” and put on an international wanted list.
During this period, Kuchinsky and his “representatives” used the platform to facilitate the buying and selling of “digital tokens (tokens)”, the legal term used to define cryptocurrencies under the law. Belarusian, with cash and non-cash payments. They also offered exchanges between cryptocurrencies, the Investigative Committee of Belarus explained this week.
In total, Bitok operators carried out almost 8,000 transactions involving digital currencies for a total amount of more than $29 million, details a press release. The estimated damage to the state budget, resulting from tax evasion in their activities, amounts to more than 9 million Belarusian rubles (more than 3.5 million dollars at current exchange rates).
Minsk officials also pointed out that the suspects used anonymization tools, SIM cards registered under false identities and accounts on foreign crypto platforms that allowed them to stay under the radar. Eventually, investigators were able to identify all participants in the crypto-trading system, intercept their correspondence with customers, and trace their money transfers.
During the searches, the police confiscated computer equipment, documents and removed cash amounting to $280,000. Belarusian law enforcement was also able to establish the bank accounts used by the defendants in Belarus and Georgia that had 2 million rubles (nearly $800,000) in their balances, and arrest them.
With help from Moscow, Belarus obtained a database containing information on 2,000 Bitok clients whose activities are also under investigation. Those who made the largest transactions, exceeding $50,000 in fiat equivalent, were questioned, the investigation department said.
Crypto Exchanger Continues Operations Amid Ongoing Investigation
Despite the detention of his accomplices and their prosecution, Vladislav Kuchinsky continued to operate the online exchanger, advised customers to ignore calls from law enforcement and attempted to withdraw funds from frozen accounts. Belarus has now issued an international arrest warrant for Bitok’s owner and charged him with tax evasion in absentia.
The investigative committee pointed out that the operation of the crypto-trading service was illegal because it was not properly registered as a resident of Belarus High-Tech Park (HTP). The latter is responsible for implementing a special legal regime established to facilitate the development of the country’s digital economy, including its crypto sector.
Belarus legalized business activities related to crypto assets with a decree signed by President Alexander Lukashenko in 2017, which went into effect in the spring of the following year. It introduced tax breaks and other incentives for businesses dealing with digital currencies that register with the HTP in Minsk.
Although last spring Lukashenko hinted at possible tightening of rules for the industry and ordered the creation of a crypto wallet registry, and despite the ban on using bitcoin for payments, Belarus is ranked third in Eastern Europe in terms of crypto adoption, largely due to strong peer-to-peer activity, as indicated by the Crypto Adoption Index produced by blockchain analytics firm Chainalysis.
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