Ukraine’s new leaders begin search for missing billions

GIH: Is the Ukrainian revolution a Slavic version of the occupy movement?  Now that a new government has been installed, documents are surfacing showing that the former president (claiming to be the current president but in another country..Russia) squandered away billions, hiding in various offshore banks and building a lavish lifestyle for himself and his family.  In an economic region largely controlled by oligarchs, the situation in Ukraine can easily polarize the EU generally into a class war as we are seeing in the US.  Generally speaking the European Elite (including corporate interests) are pro-EU and the poor, or otherwise disenfranchised, are not.  Ukraine will be one of many dividing issues regarding the EU, the future of the Euro, and the markets in general.  The fallout from situation in Ukraine will be travel issues, frozen accounts, and generally a disruption of business globally, although EU is the hardest hit.  From the Guardian:

Ukraine‘s interim authorities officially formed a new government on Thursday, with one eye on events in Crimea and another on trying to stabilise the country’s disastrous economic situation.

As President Viktor Yanukovych apparently surfaced in Russia, claiming to still be the president and promising a press conference on Friday, Ukraine’s parliament set about taking measures to recover some of the billions of dollars they say went missing under his kleptocratic regime.

The new government features some old faces but also has places for a number of people instrumental in the protest movement over the past three months. The new youth minister is Dmytro Bulatov, who was kidnapped and tortured last month by thugs apparently linked to the regime, while the anti-corruption committee will be headed by Tetiana Chornovol, an investigative journalist who was also beaten to within an inch of her life on the outskirts of Kiev in December.

The parliament approved Arseniy Yatsenyuk, a key member of former prime minister Yulia Tymoshenko’s party, as prime minister. Yatsenyuk, who was previously foreign minister, was one of the three main protest leaders of the past three months. He began his first speech in office by calling for a minute’s silence for those who died in last week’s violence.

Yatsenyuk stressed the enormity of the task facing the new government and said joining it could be akin to political suicide, given the tough economic times that are likely to be ahead.”I told everyone who is coming into this new government that they are effectively ending their political career by doing so. But we need to think about how we can save the country,” Yatsenyuk said.

Oleksandr Shlapak, the new finance minister, said he hoped an International Monetary Fund mission would visit Ukraine next week to hammer out the details of a $15bn package for the struggling economy. The hryvnia, Ukraine’s currency, hit a new low on Thursday . It has now lost more than 20% of its value this year.

Speaking in parliament, Yatsenyuk said that the former government had left the country with $75bn of debts. “Over $20bn of gold reserve were embezzled. They took $37bn of loans that disappeared,” Yatsenyuk said. “Around $70bn was moved to offshore accounts from Ukraine’s financial system in the last three years,” he claimed.

Rostyslav Pavlenko, an MP from the UDAR party of former boxer Vitali Klitschko, said that all cases of suspected money laundering and all offshore accounts of former government officials should be investigated, with the aim of repatriating the funds to Ukraine.

“The money in Yanukovych’s personal accounts and in the accounts of his family would be enough to cover many current needs of Ukraine,” he said. He added that, if the new government did sign the EU association agreement that Yanukovych faltered over, it would be easier to investigate offshore havens and return the stolen money.

Klitschko, who plans to stand in presidential elections on 25 May, called on US and European officials to freeze any accounts suspected of belonging to Yanukovych and his inner circle and return the money to Ukraine.

Switzerland said it was ready to freeze any funds that Yanukovych might be keeping in its banks. The Swiss foreign minister said financial institutions had been ordered to show increased vigilance when dealing with Ukrainian funds. Yanukovych’s son Oleksandr, who has amassed a fortune measured in the hundreds of millions of dollars in the past three years, opened a branch of his company, MAKO, in Geneva in 2011.

Meanwhile, investigative journalists are sifting through a haul of documents retrieved by divers from the river near Yanukovych’s lavish residential compound outside Kiev. The documents, which are being restored by specialists after being dried in one of Yanukovych’s personal saunas, are gradually being posted online, and purport to show multimillion dollar corruption and financial mismanagement.

Yanukovych himself, who has been the invisible man since he fled the capital last Friday night, surfaced on Thursday yesterday with a statement claiming he was still president, and is apparently due to give a press conference in the southern Russian city of Rostov-on-Don on Friday afternoon, Russian media reported.

“On the streets of many cities, there is an orgy of extremism,” wrote the president in a statement addressed to the Ukrainian people. “I am certain that in these conditions all the decisions taken [by the parliament] will be ineffective and not carried out. In this situation, I officially declare that I am determined to fight to the end for the implementation of important compromise agreements that will bring Ukraine out of the deep political crisis.”

However, even among the president’s close allies, he has lost authority after his flight, with the mayors of towns in his eastern heartland describing him as “history”, his closest aides fleeing or resigning and Rinat Akhmetov, the oligarch closest to him, saying he is ready to work with the new authorities. Even in Crimea, where the pro-Russian populace has shown little appetite for accepting the regime change in Kiev, there is little sympathy for Yanukovych personally.

There were rumours yesterday that Yanukovych was at a government-run sanatorium outside Moscow, however the location of his press conference, in Rostov, not far from the Ukrainian border, suggests he might have arrived there directly from Ukraine.

“Given that President Yanukovych appealed to Russian authorities with a request to guarantee his personal safety, that request has been granted on Russian territory,” a government source told Interfax earlier on Thursday yesterday without specifying the ousted president’s location.

The Ukrainian parliament has voted that Yanukovych should be sent to the international criminal court in The Hague, though legal experts have said the court would be unlikely to take on such a case.

About the author


We've been closely watching the Crypto Currency Market if you can call it that, with all the fake data, fraud, and related problems.  One thing stands out - it's not so different than FX, commodities, futures, or stocks.  Market dyn...

Bitcoin and other cryptocurrencies flash-crashed Saturday night, one day after the US Commodity Future Trading Commission (CFTC) sent subpoenas four cryptocurrency exchanges in an ongoing probe into bitcoin manipulation that began in late July - following the launch of bitcoin futures on the CME, according to the Wall Street Journal
CME’s bitcoin futures derive their final value from prices at four bitcoin exchangesBitstamp, Coinbase, itBit and KrakenManipulative trading in those markets could skew the price of bitcoin futures that the government directly regulates.
In delay reaction, Bitcoin fell as much as $433 or 5.6% in Saturday night trading, with some noting that the flash crash happened shortly after a 90th ranked crypto exchange, Coinrail, had suffered a "cyber intrusion", and was likely the more relevant catalyst for the crypto price drop.
While major Cryptocurrencies were down from 4.5 - 5.5%, Bitcoin Cash dropped over 8.4%. 
The CTFC subpoenas were issued after several of the exchanges refused to voluntarily share trading data with the CME after being asked last December. Of note, the CFTC regulates the CTC. 
According to the WSJ, the CME, which launched bitcoin futures in December, asked the four exchanges to share reams of trading data after its first contract settled in January, people familiar with the matter said. But several of the exchanges declined to comply, arguing the request was intrusive. The exchanges ultimately provided some data, but only after CME limited its request to a few hours of activity, instead of a full day, and restricted to a few market participants, the people added.
What is curious, is that if there was indeed manipulation since the launch of bitcoin futures, it was to the downside, as the price of cryptos peaked around the time the crypto futures were launched, and are down well over 50% in the 6 months since.
Coinbase in particular has been under the watch government regulators. On February 23, Coinbase sent an official notice to around 13,000 customers to notify them they were legally required to turn over their information to the IRS
The IRS had initially asked Coinbase in July 2017 to hand over even more detailed information on every one of its then over 500,000 users in an attempt catch those cheating on their taxes. However, another court order in Nov. 2017 reduced this number to around 14,000 “high-transacting” users, which the platform now reports as 13,000, in what Coinbase calls a “partial, but still significant, victory for Coinbase and its customers.”
Coinbase told the around 13,000 affected customers that the company would be providing their taxpayer ID, name, birth date, address, and historical transaction records from 2013-2015 to the IRS within 21 days. Coinbase’s letter to these customers encourages them “to seek legal advice from an attorney promptly” if they have any questions. Their website also states that concerns may also be addressed on Coinbase’s Taxes FAQ. The ongoing legal battle between Coinbase and the US government dates back to November, 2016, when the IRS filed a “John Doe summons” in the United States District Court for the Northern District of California.
On Feb. 13, personal finance service Credit Karma released data showing that only 0.04 percent of their customers had reported cryptocurrencies on their federal tax returns. 
And in April, former New York Attorney General, Eric "we could rarely have sex without him beating me" Schneiderman, launched a probe of 13 major cryptocurrency exchanges according to the Wall Street Journal - claiming that investors dealing in the fast-growing markets often don’t have the basic facts needed to protect themselves.
Former AG Schneiderman’s office said the program, called Virtual Markets Integrity Initiative,  is part of its responsibility to protect consumers and ensure the integrity of financial markets, and its goal is to ensure that investors can have a better understanding of the risks and protections afforded them on these sites.
CFTC Commissioner: Crypto is a "modern miracle"
While the CFTC, IRS and New York Attorney General's office are all cracking down on cryptocurrency exchanges, it seems to all be part of the government's embrace of virtual currencies.  Last week CFTC Commissioner Rostin Benham called cryptocurrencies a "modern miracleat the Blockchain For Impact Summit held at the UN in New York last week. 
But virtual currencies may – will – become part of the economic practices of any country, anywhere.  Let me repeat that:  these currencies are not going away and they will proliferate to every economy and every part of the planet.  Some places, small economies, may become dependent on virtual assets for survival.  And, these currencies will be outside traditional monetary intermediaries, like government, banks, investors, ministries, or international organizations.
We are witnessing a technological revolution.  Perhaps we are witnessing a modern miracle. -Rostin Benham
Rostin hinted at the upcoming legal action against the exchanges during his speech:
Under the CEA and Commission regulations and related guidance, exchanges have the responsibility to ensure that their Bitcoin futures products and their cash-settlement process are not readily susceptible to manipulation and the entity has sufficient capital to protect itself.  The CFTC has the authority to ensure compliance. In addition, the CFTC has legal authority over virtual currency derivatives in support of anti-fraud and manipulation including enforcement authority in the underlying markets.

Meanwhile, the official Bitcoin website removed references to Coinbase, and Bitpay, according to Crypto News - only one of which, Coinbase, was subpoenaed.  just removed/censored the 2 largest US Bitcoin companies (@BitPay Payment processing and @coinbase Bitcoin Exchange). It’s a good move: Bitcoin Core is obviously no longer Bitcoin, and should ideally be removed from both @BitPay and @coinbase too.

The CFTC officially recognized bitcoin as a commodity in September of 2015 when it went after Coinflip for operating a platform for trading bitcoin options without the proper authorization. Since the agency effectively asserted its dominance over the bitcoin market with that decision, this is the first time it has given its blessing to an bitcoin options trading platform. Expect a burst of institutional trading activity to follow - especially since they approved institutional options trading in July
This post sponsored by Total Cryptos @  


Follow Global Intel Hub

Follow GIH and get free updates on Global Intelligence, Analysis, and more.

Subscribe to Blog via Email

Enter your email address to subscribe to this blog and receive notifications of new posts by email.

%d bloggers like this: