The NBU has identified a cryptocurrency company that was unlawfully issuing high-interest loans in hryvnia.

The National Bank of Ukraine has discovered that the BitCapital service was illegally providing loans to Ukrainians. This service is disguised in contracts as offering loans in crypto assets.

This was reported by RBK-Ukraine citing the press service of the NBU.

"In-depth analysis revealed that the BitCapital service, while formally providing loans in USDT, was actually issuing credits in the national currency of Ukraine - the hryvnia, bypassing all legally established regulatory mechanisms," the statement said.

The NBU received more than 700 complaints from citizens who became clients of the illegal lending scheme through the BitCapital service's website.

In their complaints to the NBU, consumers reported high interest rates, unlawful charges on loans, aggressive and blatantly uncivilized debt collection practices, and complete opacity of loan conditions. Socially vulnerable groups, as well as military personnel, were particularly affected, as the company denied them the benefits provided by Ukrainian legislation and aggressively pursued debts.

"It is important to remind that the Constitution of Ukraine, the Civil Code of Ukraine, and the laws of Ukraine 'On Payment Services' and 'On Currency and Currency Transactions' clearly state that the only legal means of payment in Ukraine is the hryvnia, while legislation regarding virtual assets is currently being developed," the NBU noted.

The NBU's inspection identified systemic violations of Ukrainian legislation, namely:

• exceeding the maximum daily interest rate;
• non-compliance with consumer protection laws regarding contract requirements and reflecting the total cost of credit;
• information opacity and misleading regarding loan conditions;
• lack of mandatory disclosure information on the website, and similar issues.

The National Bank of Ukraine warns all citizens to exercise extreme caution when interacting with various online platforms and services, especially those dealing with virtual assets.

Tether (USDT) is a cryptocurrency that belongs to so-called "stablecoins," tokens whose value is pegged to fiat currency, in this case, dollars.

In October of last year, NBU head Andriy Pyshny noted that the only legal means of payment in Ukraine is the hryvnia, and this remains the NBU's fundamental position. Cryptocurrency is not considered such a means.

The NBU has previously stated that it does not regard cryptocurrency as a means of payment. As noted by First Deputy Head of the National Bank Yekaterina Rozhkova, we have already witnessed significant upheavals in these markets in the U.S., "when it turned out that cryptocurrencies that were supposed to be backed by physical dollars were actually backed by nothing, which presents very large risks."