- A recent analysis by RUSI suggests that the Ukrainian government’s budget is missing out on at least $10 billion due to inadequate cryptocurrency market oversight.
- The report highlights Telegram channels and ‘drops’ (money mules) as significant concerns in the Ukrainian digital currency landscape.
- Without robust legal frameworks, Ukraine is vulnerable to becoming a haven for laundering funds originating from Russia.
Ukraine is estimated to have already incurred losses of at least $10 billion because of the incomplete regulation surrounding digital currencies. This finding is detailed in an assessment released in August by the Royal United Services Institute for Defence Studies (RUSI).
Experts pinpoint several critical dangers: the unregulated nature of over-the-counter (OTC) cryptocurrency exchanges, the potential use of digital assets to procure restricted components for the Russian military, and networks of money mules.
“Accompanying the surge in virtual asset usage are emerging avenues for illicit financial activities, particularly through money mule schemes, commonly known as ‘drops’ within Ukraine,” the RUSI analysis stated.
RUSI’s calculations indicate these schemes alone are draining the Ukrainian state budget by approximately $24 million each month.
The analysis emphasizes that Telegram is a frequently used platform by individuals connected to Russia for conducting unlawful crypto transactions, which sometimes includes narcotics dealing.
Cybercrime’s connection to illegal funding necessitates decisive measures from the Ukrainian governing bodies through the introduction of defined market standards, experts urge.
“A failure to address this swiftly could expose Ukraine to becoming a hub for illicit Russian financial activities, while simultaneously discouraging legitimate crypto startups due to excessive levies and corruption,” the analysts caution.
RUSI contends that improved regulatory enforcement could lead to the recovery of up to $10 billion for the Ukrainian budget.
Despite the passage of the Law on Virtual Assets back in 2022, its implementation remains stalled due to unresolved issues about how these assets will be taxed.
In April 2025, a draft law, No. 10225-d, was presented to parliament. This draft law addresses crypto platform licensing, capital requirements, transparency standards including KYC (Know Your Customer), and new reporting requirements. Nevertheless, an official regulatory body dedicated to overseeing this sector is still lacking.
Danylo Hetmantsev, Head of the Parliamentary Committee on Finance, Taxation, and Customs Policy, suggests that crypto market legalization legislation will be reviewed in September.
Specialists emphasize that immediate action is essential.
“Legislative action is not crucial for initiating a response,” RUSI explained, advocating for the fostering of cooperation between the public and private sectors, as well as leveraging private sector tools to pinpoint and curb unlawful operations.
It’s worth remembering that the Bureau of Economic Security of Ukraine previously stated that, from 2013 to 2023, the national treasury missed out on about UAH 3 billion in taxes due from crypto exchanges established by individuals residing in Ukraine.
As per a Ukraine Economic Outlook analysis that KUNA commissioned, Ukraine lost $48.8 billion in direct income and almost $4 billion in tax receipts from 2016 to 2022 due to a lack of crypto market regulation.
Furthermore, a Global Ledger assessment for the Ministry of Digital Transformation indicated that the country experienced a loss of UAH 8.34 billion in tax revenues over four years. Personal income tax worth between UAH 1.31 billion and UAH 6.53 billion could have been collected solely from the users of just one centralized exchange.