Ukraine’s National Police have arrested several suspects who were illegally producing bitcoins at a recreation center of a Ukrainian state institute, according to newly released court documents.

Police found that 200 computers had been set up in an unused swimming pool at the Paton Electric Welding Institute’s recreation center to generate bitcoins, the world’s most popular digital money.

The investigation became public on Aug. 8 after Kyiv’s Sviatoshinsky District Court published a court decision in the state register of court rulings. In it, the court claims the production of the bitcoins was being carried out illegally, violating several Ukrainian laws.

Police tracked down the allegedly illegal bitcoin producer with the help of an SBU security service agent, who “found out the exact location of illegal hardware that was secretly generating digital money, which was later used via payment systems that are unauthorized in Ukraine.”

The court claims the suspects had no rights to use the state premises – a swimming pool. They also breached the Law on the National Bank of Ukraine by emitting “substitute money” and forging documents to launder it. Under the law, only the central bank can issue currency in Ukraine.

According to the Law on the National Bank, there is only one national currency, the hryvnia, and no other currency or substitute currency can be issued or used as a form of payment in Ukraine. The law does not specify what a “substitute currency” is, however.

Neither are there any laws in Ukraine that regulate virtual currencies. The National Bank of Ukraine, however, has frowned at cryptocurrencies, dubbing them “a substitute for real money.”

Nevertheless, as there is no official restriction on the use of cryptocurrencies, some Ukrainian companies now accept bitcoins as payment.

The value of one bitcoin today is $3,300 (Hr 85,000).

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