The National Bank of Ukraine has decided to recognize the presence of characteristics of a financial service for providing loans in transactions conducted on the "BitCapital" platform. This is the first such decision regarding a company operating in the market without the appropriate license.
As reported by the regulator on its website on Tuesday, over 700 citizens have filed complaints with the NBU about the online service "BitCapital," which provided loans in hryvnias without a license, violating legal requirements and concealing its activities in consumer contracts as lending in crypto-assets.
"The National Bank received more than 700 inquiries from citizens who became clients of an illegal lending scheme through the website of the 'BitCapital' service, which displayed information about a non-resident legal entity providing services on the 'BitCapital' platform, namely - Golden Interest Group Limited," the press release states.
It is noted that while "BitCapital" formally issued loans in USDT, it actually provided loans in the national currency of Ukraine - hryvnia, bypassing all established regulatory mechanisms set by law.
Consumers, in their inquiries to the National Bank, complained about high interest rates, unjustified charges on loans, aggressive debt collection practices, and lack of transparency in lending conditions.
"Socially vulnerable groups of the population, as well as military personnel, turned out to be particularly vulnerable, as the company denied them the benefits provided by Ukrainian law and aggressively pursued debt collection," the central bank emphasizes.
Due to the presence of signs indicating the provision of illegal financial services in violation of consumer rights protection legislation, the National Bank conducted an inspection, which revealed systemic violations of the law.
Among these violations were: exceeding the maximum daily interest rate on loans, non-compliance with legislation regarding the requirements for loan agreements and the disclosure of the total cost of credit, lack of transparency in information, misleading regarding loan conditions, and the absence of mandatory disclosure information on the service's website.
"The service was essentially created to provide loans to individuals outside the legal framework of Ukraine and the appropriate regulatory oversight," the National Bank emphasized.
The NBU also noted that there is currently an indication of an unsatisfactory business reputation concerning key individuals, the head, and owners of significant stakes in the service.
The regulator reminded that such new powers regarding the right to decide on the classification of certain services or operations as a specific type of financial service and to prohibit them were granted to it by the law "On Financial Services and Financial Companies."
In the press release, the National Bank warned all citizens to exercise extreme caution when interacting with various online platforms and services, especially those working with virtual assets.
"Before signing any contract for the provision of a financial service or a service resembling a financial one, be sure to check on the official website of the National Bank whether such an institution is included in the NBU registers. If it is, it must comply with all legal requirements," the regulator stressed.
The NBU is currently analyzing information obtained from consumer inquiries regarding other similar cases and hopes that its decision will provide important additional arguments in the lawsuits initiated by affected citizens.
The National Bank also reminded that according to the Constitution, the Civil Code, and the laws "On Payment Services" and "On Currency and Currency Transactions," the only legal payment method in Ukraine is the hryvnia, and legislation on virtual assets is currently being developed.
"The absence of a comprehensive law regulating virtual assets creates gaps in legal regulation, which unscrupulous individuals immediately try to exploit. At the same time, regulatory bodies in financial markets have periodically warned and informed citizens about the risks associated with operations involving virtual assets since 2017," the regulator noted.