Michael Chobanian, a 37-year-old buccaneer schooled in a British private school, is fluent in both English and the folkways of Ukraine, which he views as a mainly lawless frontier that he enjoys traversing in his black Ferrari 612. He is the founder of Kuna, one of the earliest cryptocurrency exchanges in Eastern Europe. To him, his native nation is an excellent place to establish a business, provided you have the confidence to navigate a crooked system. 

Among the benefits, he argues in his office overlooking the Dnieper River, is a level of liberty not seen in developed countries in hundreds of years. 

For instance, it is possible to get away with murder. 

"In this country, you can murder someone and not face prosecution if you have enough money and connections," he explained as he sipped tea on a sumptuous leather sofa. "If you are not connected, you will pay a higher price." 

Ukraine's anything-goes culture has tormented the country for years, and the government is now seeking to bury it, aided by Bitcoin. In early September, the country's Parliament enacted a bill legalising and regulating Bitcoin, the first step in an ambitious push to mainstream the country's growing crypto commerce while also rebranding the entire country. 

"The overarching goal is to establish Kazakhstan as one of the world's leading jurisdictions for crypto firms," said Alexander Bornyakov, deputy minister of the Ministry of Digital Transformation. "We feel that this is the new economy, that this is the future, and that this is something that will help our economy grow." 

He's condensed the argument into a 90-second commercial that markets Ukraine in the same way that Apple markets its products. A montage of bakers, executives, nurses, and miscellaneous inhabitants are seen leading contented lives in a type of high-tech heaven, set to a grinding techno backdrop. 

"We invest in companies and foster their growth," an English-speaking female narrator explains. "Our objective is to create the world's most convenient country for people and business." 

Bornyakov has taken that message — Ukraine as the ultimate place for businesses seeking low taxes, no red tape, and an abundance of competent engineers — on the road, culminating in a summer tour of Silicon Valley. Volodymyr Zelenskyy, the country's president, met with Apple CEO Tim Cook and Stanford students. 

Numerous economists and policymakers are highly distrustful of cryptocurrency, branding it the preferred currency of money launderers, terrorists, mobsters, and ransomware extortionists. However, an international Crypto's Got Talent competition is currently ongoing, with participants from numerous nations. As entrepreneurs flood the market, some governments have made a straightforward calculation. 

If investors are going to invest in these businesses, they should be attracted to relocate. And investors have been pumping at a frenetic pace recently. According to CB Insights, a group that follows the industry, funding for all blockchain-related technology — cryptocurrencies, gambling, infrastructure, and non-fungible tokens — increased to $7 billion in the first half of this year. 

As a result, Poland is offering tax advantages and financial assistance to entice technology professionals, even stealing them from Ukraine. (A counteroffensive, Bornyakov stated, is in the works.) Lithuania, Estonia, Malta, Mexico, Thailand, and Vietnam are also vying for the championship. 

For Ukraine, the objective is not simply to create new jobs and increase tax revenue. Ukraine, which has been tarnished by financial scandals and battered by oligarchs' infighting for decades, is now Europe's second poorest country. By forging a strong connection to a digitally dominated financial system and culture — online passports have already been implemented — Ukraine's leaders hope for a big reset, one that will rewrite the country's long-running narrative of anarchy and corruption since independence in 1991. 

The issue is that many computer entrepreneurs in our country claim to prefer the system as-is, and they are particularly fond of its shortcomings. Which brings us to the central paradox of Ukraine's attempt at rebirth. The country is attempting to provide legitimacy and light to a group of CEOs who frequently choose anonymity and quasi-outlaw status. 

Ukraine has already attracted some Americans and Britons in the cryptocurrency industry, and they did not come because they are zealous defenders of the rule of law. Rather than that, they wax lyrical about anything from inexpensive restaurants to out-of-control raves. Even worse, the government has no idea what they do or how much money they earn.

"There are no rules," Chobanian stated emphatically, with an unusual sort of civic pride. "Of course, there are regulations, but they can be broken. It strikes the ideal balance between anarchy and possibility." 

Awakening a 'Superstar'

Ukrainians are among the world's most fervent cryptocurrency users, placing fourth on Chainalysis's Global Crypto Adoption Index. Approximately $8 billion of it now enters and exits the country each year, and the daily number of crypto transactions, over $150 million, currently exceeds the amount of interbank fiat currency trades. 

This is not so much a case of crypto-fever as it is a case of a lack of other options. Banks in Ukraine are so inefficient that sending or receiving even little amounts of money from another nation takes an aggravating maze of paperwork. 

Similarly, inflation has eroded the national currency, the hryvnia. Ukraine lacks a robust stock market, and foreign ones are largely inaccessible. For individuals looking for an appreciation on their savings, the only options are real estate and cryptocurrency. The latter is frequently wildly volatile; Bitcoin lost half its value between April and July of this year before recouping its losses and setting a new record high in October. However, it is more liquid than a house, for example, and frictionless in comparison to the fiat system. 

"The banks have been extremely effective in creating demand for my services," Chobanian explained. 

Kuna now processes approximately $3 million in daily transactions, a pittance in comparison to Goliaths like as Binance, but sufficient to place the company on a recent Forbes list of Ukraine's most valuable enterprises. It took years for this degree of popularity to emerge. Chobanian explained that the first time he sold cryptocurrency, it seemed like a heroin trade. 

It was March 2014, the month he introduced Kuna, a cryptocurrency named after an animal skin that was once used for payment. At the time, it was a three-man operation consisting primarily of a website with a phone number and a stated exchange rate. Chobanian staked Kuna with approximately 50 bitcoins, which he bought in 2011 after conducting research into the banking and payments business and determining that crypto had the potential to revolutionise the world. 

A consumer called with a request for approximately $100 in Bitcoin. The two crossed paths on a street in central Kyiv. The gentleman handed over cash; Chobanian wired Bitcoin via his smartphone. 

"I felt as if I were scared," he recalls. "I anticipated swift arrest." 

It took a little longer than anticipated. In November 2015, the police showed up at his flat in what was then a common effort at a shakedown. At the time, Kuna performed all of its business online and had established itself as the exchange of choice for an increasing number of cryptocurrency enthusiasts. Five police officers searched Chobanian's flat for hours and seized his cellphones, computers, and even Wi-Fi routers. 

"They imagined I have cash as well," Chobanian explained. That he did not. He was aware that he was obliged to appear at the police station and redeem his equipment. Rather than that, he penned an impassioned essay about the ordeal on his lawyer's computer and shared it to Facebook. 

"The next morning, I awoke a superstar," he explained. "I appeared on five or six talk shows, including the country's top-rated political show." 

Penny ante corruption, such as payments to traffic cops, has almost disappeared, and the country has improved its ranking in Transparency International's corruption perceptions index since 2012. On the other hand, a free-for-all mentality endures. Ukraine is cracking down on forged Covid-19 vaccination certificates, and nobody seems to mind that Kyiv Mayor Vitali Klitschko, a former heavyweight boxing champion, resides above a strip club infamous for its prostitution. (It is unclear whether the mayor owns Rio, as the club is known.) Although it does appear to operate according to its own set of regulations; in an April protest in front of City Hall, a group of entrepreneurs singled out Klitschko, alleging that Rio remained open during the pandemic while other businesses were forced to close.) 

During a walking tour of Kyiv, Chobanian discussed corrupt politicians and development projects that bold developers have recently begun building in defiance of zoning laws and licence requirements. He described these events with a rueful sense that something about Ukraine was horribly flawed. Nonetheless, these flaws enable him to run his business independently. What makes this country great for Kuna—weak government, scarcity of guardrails—is a national catastrophe for the rest of the populace. 

For the time being, the government has no information on the size, revenue, or structure of his business, including employee numbers. When a lady gives him tea during our interview, he refers to her as a "entrepreneur," explaining why he does not pay her a wage. 

"At the moment, the government is not involved in my business," he explained. “None.” 

'You Need Lawyers'

Ukraine has endured far too many financial scandals to anticipate a significant migration of executives from large international investment banks, inducements or not. However, along came crypto, which has its own reputational issues. Perhaps this is an ideal match. 

That was not how Bornyakov described the benefits of cryptocurrency during a pivotal meeting earlier this year with Zelenskyy, a former television comedian who was elected president in 2019 and is perhaps best known as the guy on the phone with former President Donald Trump during the initial Trump impeachment. Bornyakov emphasised both the prospects for jobs and economic progress, as well as the risks associated with inaction. 

"There is a shadow economy here," Bornyakov explained in an interview, "and if nothing is done about it, it will grow and grow, and we have no idea how it will finish." 

He was speaking at a sumptuous communal office space in a fashionable neighbourhood of the city. Creative States is marketed by its owner as a "five-star business hotel," and the ground floor features an art deco-inspired cafe and plenty of taupe-upholstered furniture, including a sofa with throw pillows with photographs of the cast of 'Friends'. Three storeys of new businesses are located here. 

While Bornyakov could work at the ministry's dreary Soviet-era offices, his decision to relocate to a vibrant entrepreneurial hotspot highlights his purpose as a radical departure from government as usual. And he's only beginning. "We're going to establish digital embassies around the world," he explained, "staffed by what we refer to as digital ambassadors." 

The goal is to double the contribution of technology to the gross domestic product, from 5% to 10%, and to double the number of people employed in the technology industry, to around 500,000. By 2025, when the World Bank estimates Ukraine's GDP to reach $180 billion, technology should account for $18 billion of that total. 

What about the corruption that has afflicted this country and may deter prospective emigrants? Without raids and seizures, future administrations may be unable to allow technology companies to thrive. Russia is a threat to the east. Additionally, revolutions are a cause for concern. Two have occurred since 2004. 

Even in the absence of another revolution, Steven Hanke, an applied economics professor at Johns Hopkins University and a vocal Bitcoin critic, says that the combination of Ukraine and crypto seems like a recipe for disaster. According to the majority of studies he's seen, nearly half of all Bitcoin transactions are for unlawful purposes. According to him, this is not an industry that Kyiv should be courting with incentives. 

"The country is rife with rampant corruption and criminal syndicates," he stated. "Ukraine will appeal to unscrupulous personalities because unscrupulous characters enjoy infiltrating countries such as Ukraine." 

Bornyakov disagrees, yet he does so in an oddly reassuring manner. Outsiders, he says, will always have a measure of built-in security simply because they are foreigners. 

"You could travel to Egypt, where I'm aware there are a lot of problems," he remarked. "However, if you're a tourist, nobody is going to harm you, nobody is going to touch you, because the locals know that tourists bring them money on an innate level. We're attempting to replicate that circumstance here." 

As Chobanian demonstrated during the police search of his residence, a tech company's principal assets cannot be seized in the same manner that a malicious actor could take over, say, a power plant or a nickel mine. Appropriating a knowledge company, such as Kyiv-based Hacken, a cybersecurity firm that specialises in blockchain technology, would be difficult. Its worth is derived from a global network of white-hat hackers. 

Its cofounder Evgenia Broshevan sat in a Creative States conference room, musing on how woman came to be a leader in such a male-dominated sector. All credit goes to her grandmother, a mathematics instructor who also appears to have endowed her with an aptitude for practical thinking, which is definitely necessary in Ukraine. 

"In any case," she replied, referring to the company's potential hazards, "you need to have lawyers." 

'I Enjoy It Being Corrupt'

The 11 Mirrors Rooftop Restaurant features a $180 rib-eye, autographed celebrity photographs on the wall, and a panoramic view of downtown Kyiv. It has the look and feel of a steakhouse flown from a Las Vegas casino, and it is owned by the mayor's brother, fellow heavyweight sensation Wladimir Klitschko. Carousers will find the area excellent. Rio, the strip club, is located just down the block. 

Two members of the international crypto talent pool are seated at a small round table one recent evening. Hartej Sawhney, a Princeton, New Jersey native, co-founded Zokyo, a crypto auditing firm that performs security audits on tokens and smart contracts. Shadi Paterson is a British entrepreneur who owns a firm that recruits personnel for cryptocurrency startups. He's dressed in a T-shirt that reads, "Take Your Pills." 

Both guys are residents here, and both exude a sense of belonging to the appropriate location and group.

"Today, there are various ways to 100X your money in cryptocurrency," Sawhney explained. "At its pinnacle, the internet grew at a 63 percent annual rate in terms of users. Since its start, cryptocurrency has grown at a rate of 137 percent." 

As is the case with many other international crypto entrepreneurs who live here, the two men characterise the country as a sensory nirvana. Everything is one-fourth the price of Manhattan, from meals to chauffeurs. Ketamine and MDMA are readily available during raves. Additionally, the dating scenario — at least according to their story — appears to be fashioned after a season of 'The Bachelor'. 

"They are literally competing to impress you," Sawhney explained of his encounters with Ukrainian women. "It's occurred dozens of times here when, rather than me hitting on a woman, the woman hits on me—a woman I believe is out of my league." 

The two men are hesitant to sing Ukraine's praises too loudly. They are concerned that if the country's attractions become widely known, more people would move here, eroding the advantages of life as a foreigner. 

Sawhney and Paterson have conflicting views on the new cryptocurrency law. They recognise the potential benefits of the legitimacy conferred by a government seal. Additionally, they enjoy running businesses that are not subject to Ukrainian legislation and do not pay Ukrainian taxes. The country's fragile relationship with morality serves as a selling factor. 

"I enjoy the fact that it is corrupt here," Sawhney stated. "Here, we get to play a game that only the aristocracy in the United States get to play. I am not in need of a lobbyist. I can pay someone at the border if I need to. I can afford to bribe politicians." 

Sawhney wishes that his firm operate not just behind the radar, but completely beneath it. Paterson was aware of the impulse. However, he stated that he would either have to pay a percentage to gangsters to launder his money or a percentage "to the other gangsters," specifically the Ukrainian government, to convert his crypto savings into a properly protected cache. 

The Ministry of Digital Transformation will undoubtedly frame it differently in future road shows, but Paterson grasped the core of the government's message. 

"I can legalise all my money and no country will object?" he asked, as if recounting a dream. "Am I able to transmit it anywhere?" Can I use it to purchase a house? That, to crypto enthusiasts, is somewhat insane."

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