WebMoney UA, the Ukrainian arm of alternative payment provider, WebMoney, has announced that customer funds held at the company’s banking partner have been unfrozen. Approximately $6.15 million in funds had been frozen by the Ministry of Income and Taxes following a June 2013 government raid into the company’s office. The raid was based on allegations that the firm wasn’t reporting correctly to the county’s central bank, Bank of Ukraine.
With the news, WebMoney stated that it will be resuming operatings that have been halted since June of last year. Within their announcement, WebMoney UA also continued to claim is innocence, by stating that it was near finalizing the legal battle of “fabricated” claims against them. The wording was similar to a statement from WebMoney last year where they stated that claims “that the WebMoney system is used for tax evasion, is absurd”.
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Among alternative payment products being used for online purchases, WebMoney among the more popular products being used in Russia and CIS nations. Similar to the now defunct Liberty Reserve, WebMoney is a centrally backed form of digital currency, with fiat money converted into WebMoney accounts. WebMoney accounts, also called purses are available in numerous currencies including dollars, rubles, and bitcoins. The payment system partners with financial institutions in various countries who guarantee customer deposits and back the exchange of WebMoney to fiat.
In the case of WebMoney UA, funds were frozen at the company’s guarantee bank. During the entire period of government seizure on customer funds, only the UA unit was targeted, with operations at the main Russian entity remaining untouched by local authorities. However, as an operator of an alternative form of payments, WebMoney’s name sprung up in recent industry conversations following the Central Bank of Russia’s (CBR) announcement against bitcoins and other forms of virtual currencies. In discussions with local firms operating in the online space, it was related to DC Magnates, that WebMoney operates in what they considered a ‘gray zone’ and didn’t fall under the CBR’s warning.