Ukraine Bans WebMoney Transfers due to Sanctions against Russia

The National Security and Defence Council of Ukraine has been updating its list of Russian companies that are subject to sanctions. The latest action on part of the authority includes WebMoney, a service which has been operating in Ukraine for over 15 years.

WebMoney Transfer has been prohibited from operating in Ukraine as part of measures which the local government is taking against companies from Russia. The Ukrainian National Security and Defence Council is acting in accordance with a Presidential Decree from Petro Poroshenko. The measure is valid for an initial period of three years.

Back in 2013, the offices of WebMoney Ukraine got raided by the police as part of the ongoing tensions with Russia. Earlier in May, Finance Magnates reported that the country's law enforcement authorities have raided some broker offices.

Targeting Non-Banking Payments Payments One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl Read this Term

With the increasing pressure on part of the Ukrainian government, a number of businesses which have operated in Ukraine for years have been forced out in a matter of weeks. The fact that WebMoney was officially registered by the National Bank of Ukraine as an intra-state settlement system did not deter the government from taking action.

On its website, WebMoney states that the limitations on its operations in Ukraine are “based on an unjustified and groundless decision”. The company states that it adheres to data protection laws and has a variety of security layers, KYC and AML procedures which are up to global standards.

Impact on the Industry

According to data published from WebMoney, the sanctions will affect four million Ukrainian residents who are using the system alongside with many businesses. A number of brokerages have been operating via WebMoney on the territory of Ukraine. The service has been a popular alternative to using debit and credit cards for many years, yielding easier business for gaming websites and Forex Forex Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Read this Term brokers.

“We treasure our Ukrainian users and we will take every effort to restore normal operation. All funds on user wallets are secured and will be safely stored up until the date the sanctions will be abolished and the WMU flow will be resumed. The service for Ukrainian residents will be provided as normal on wallets of all types except for Hryvnia,” an official statement from the company elaborates.

Ukrainian authorities have previously claimed that some brokers have been using their profits to finance Russian separatists in Eastern Ukraine.