As Ukraine's crackdown on corruption continues, three lawmakers from Ukraine’s ruling party revealed this week that they own a combined $45 million in bitcoin, according to a report by RIA Novosti, a Russian foreign news service.
Their holdings came to light during mandatory financial disclosures by members of the Ukrainian parliament, part of an IMF-approved strategy to tamp down corruption in Ukraine. The country's democratic institutions, which were never very robust to begin with, have been further destabilized by the civil war that's seen pro-Russian separatists seize control of two regions in eastern Ukraine. Lawmakers must now disclose their assets and wealth in an online database.
Dmitry Golubov possesses the most bitcoin, with 8,752 BTC, an amount worth roughly $36 million at current prices, according to CoinDesk. Alexander Urbansky possesses 2,494 BTC, or $10.3 million, while Dmitry Belotserkovets owns 398 BTC, or $1.6 million.
Ukraine’s central bank plans to develop a regulatory framework for cryptocurrencies after discussing the legal implications of the virtual tokens at a meeting next month.
“The disclosures come as Ukraine inches toward regulating the cryptocurrency.
As reported previously, the National Bank of Ukraine – the country's central bank – revealed last week that the legal implications of cryptocurrencies will be discussed at the next meeting of the Financial Stability Board of Ukraine. That hearing, scheduled for the end of August, will bring together the nation's financial authorities.
It's unclear at this time exactly what steps the government will ultimately take. Local sources reported last week that a large cache of bitcoin mining machines were confiscated after authorities discovered them at a state-owned facility.”
Ukrainians have been exposed to the vast differences between the fortunes amassed by the country’s politicians and the more modest holdings of those they represent since an anti-corruption reform requiring senior Ukrainian officials to declare their wealth online was implemented late last year.
Some lawmakers have declared millions of dollars in cash. Others said they owned fleets of luxury cars, expensive Swiss watches, diamond jewelry and large tracts of land. These revelations have no doubt undermined public confidence in the country’s government, particularly the ruling party led by President Petro Poroshenko, whose family amassed a fortune in the confectionary business. By comparison, the average salary in Ukraine is just over $200 per month.
Poroshenko - a prominent fixture of the Panama Papers - retains control of a top TV channel and has failed to follow through on his promise to sell off his Roshen chocolate empire due to a lack of foreign interest and a dearth of rich-enough investors in Ukraine itself.
While the online declaration system has been intended to represent a show of good faith that officials are willing to open their finances up to public scrutiny, to be held accountable, and to move away from a culture that tacitly allowed bureaucrats to amass wealth through cronyism and graft, the public reaction has been one of shocked dismay at the extravagant lifestyles conjured up by many of the disclosures.
"We did not expect that this would be such a widespread phenomenon among state officials. I can't imagine there is a European politician who invests money in a wine collection where one bottle costs over $10,000," said Vitaliy Shabunin, the head of the non-governmental Anti-Corruption Action Center.
Ukraine's economy is on track to shrink by about 12 percent this year and only return to marginal growth should the eastern campaign end in 2016. Unrest in the country began back in 2014 when former President Viktor Yanukovich, who was perceived to be too close with Russian President Vladimir Putin, was forced to abdicate.