Michael Chobanian

President of the Blockchain Association of Ukraine and a founder of KUNA.io

Michael Chobanian, President of the Blockchain Association of Ukraine and a founder of the first cryptocurrency exchange in Ukraine, KUNA.io. Chobanian is an external adviser to Ukraine’s Deputy Prime Minister and Minister for Digital Transformation of Ukraine, Mykhailo Fedorov. Since the start of Russia’s full-scale war against Ukraine, Michael Chobanyan has launched a Crypto Fund for Ukraine to help the Armed Forces which has raised over $100 million of donations. At the request of the Ministry of Digital Transformation, Chobanyan helped the Government of Ukraine to create and manage state cryptocurrency wallets for donations in Kuna Exchange. Since 2020, representatives of authoritarian regimes of Belarus and Russia have been trying to obtain personal information about their opponents from the Kuna Exchange through abuse of AML/CFT laws, accusing their opponents of financing extremism and money laundering. Unlike Chinese platforms, Kuna Exchange refused to disclose information about its users due to politically motivated requests. Chobanyan therefore advocates that the regulation of democratic countries, in the EU, the US and Ukraine, should reflect preventive measures against abuses in AML/CFT regulation.


Testimonial of Michael Chobanian:

My name is Michael Chobanian, and I am a Ukrainian fintech entrepreneur and crypto enthusiast. In 2014, I founded KUNA — Eastern Europe’s first Bitcoin agency which has since transformed into a full-fledged cryptocurrency exchange with more than 450 thousand users worldwide.

On 24 February, the Russian Federation attacked my homeland with a full-scale war. Thousands of civilians have been killed and hundreds of homes have been destroyed. By the Ministry of Finance’s accounts, the damage from the Russian invasion has already amounted to $500 billion dollars—and the number rises daily.

From the invasion’s first moment, we at KUNA decided to act swiftly to help our army and the people who suffered most due to these horrific events. In collaboration with the Ministry of Digital Transformation and the Ministry of Defense, our team launched the official Crypto Fund of Ukraine to solicit cryptocurrency donations. The majority of funding comes through crypto assets such as Bitcoin and Ethereum, where AML technologies (e.g. Chainalysis, Crystal Blockchain) have been successfully implemented. All crypto that we received and converted was analysed for illegal activity. These solicited funds are used to purchase much needed medical supplies, military equipment, and humanitarian aid here in Ukraine.

As of July 2023, the Fund has collected more than $60 million dollars in donations, while in total Ukraine has raised more than $225 million in crypto donations since February 2022.

One of our top priorities throughout this fundraise was to ensure the transparency of the donation process. While KUNA is providing the technological platform for crypto donations, the Ukrainian government – specifically, the Ministries of Digital Transformation and Defense have ultimate control of the funds and it is they who are responsible for the fund’s distribution. KUNA is serving a strictly technical and organisational role in the fundraising process and coin management – crypto banking.

As CEO of the first crypto exchange in Ukraine, we provided advice and education to various financial and intelligence institutions in Ukraine, such as the Ministry of Digital Transformation of Ukraine, the National Bank, and the Secret Service/Police, on how to use cryptocurrency to counter terrorist financing and reduce money laundering.

Also important to mention that since 2020, representatives of the authoritarian regimes in Belarus and Russia have tried to obtain personal information on their opponents, accusing them of funding extremism and money laundering. In the case of Belarus, it is the BYSOL Foundation. This is a fund that helps financially those who were fired for protesting or were victims of repression by the Belarusian government.

Unlike our colleagues from the Chinese platforms, we refused to hand over information about our users due to politically motivated requests. We believe it is important that such deterrent elements are also reflected in the regulation of democratic countries, in the EU, the USA, the UK and Ukraine.

Regarding the regulation of the crypto assets providers – we see that traditional banks do not want to provide services to crypto companies because of their perception of increased regulatory risk associated with the crypto industry. Generally, it does not matter for banks whether a crypto company has a licence or not. In the existing climate, onboarding crypto companies as clients requires banks to invest in additional compliance measures to meet regulatory requirements. Banks are unwilling to bear these additional compliance costs and instead prefer to avoid dealing with crypto-related businesses altogether. Traditional banks may also perceive a reputational risk in associating with crypto companies. There have been a lot of misconceptions as to the use of crypto and lots of negative publicity. Thus, banks do not have client relationships with crypto companies.  

As a result of these challenges, crypto companies are forced to turn to financial intermediaries, such as CheckOut and Clear Junction, which work with banks on their behalf. These intermediaries charge fees for their services, increasing the operational costs for crypto companies. This ultimately puts them at a competitive disadvantage compared to businesses in other industries that can easily access traditional banking services.

In conclusion, the difficulty faced by crypto companies in opening bank accounts with traditional financial institutions is a significant problem that hampers their growth and competitiveness. This issue highlights the need for greater cooperation between the crypto industry and the banking sector, as well as the development of more effective regulatory frameworks to address the concerns of both parties.

Select the amount of a one-time donation in Bitcoin