Ukraine has suffered at least $10 billion in losses due to the absence of proper regulation of the cryptocurrency market. This data is included in the August report by the Royal United Services Institute (RUSI), which highlights the alarming economic losses for the state budget.
This is reported by Finway
Key Risks in Ukraine’s Cryptocurrency Market
In the RUSI report, analysts identified several major risks, including the activities of uncontrolled over-the-counter (OTC) platforms, the use of cryptocurrencies to purchase sanctioned goods for the needs of the Russian army, and money mule operations. The latter are often referred to as “drops” in Ukraine. According to experts, the activities of such schemes cost the budget $24 million each month.
“In response to the sharp increase in the use of virtual assets, new opportunities for illegal financial activities have emerged, particularly through money mules, which are commonly referred to as ‘drops’ in Ukraine,” the study states.
Particular attention is given to the messaging app Telegram, which has become one of the main platforms for conducting illegal crypto transactions, including those related to drug trafficking, involving Russian participants. Experts emphasize that without proper legislative control, Ukraine could become a hub for laundering Russian funds, while honest startups would be forced to face excessive taxation and corruption.
Need for Legislative Changes
RUSI emphasizes that more effective oversight mechanisms could allow Ukraine to recover up to $10 billion for the budget. Despite the adoption of the “On Virtual Assets” law in 2022, it has yet to come into force due to unresolved taxation issues.
In April 2025, draft law No. 10225-d was submitted to the Verkhovna Rada, which proposes the implementation of licensing for crypto platforms, increased transparency, capital, and identification standards (KYC), as well as new reporting procedures. However, a regulator for this sector has not yet been determined.
Danilo Hetmantsev, the head of the Verkhovna Rada Committee on Finance, Taxation, and Customs Policy, reported that the consideration of the bill on the legalization of the cryptocurrency market is scheduled for September.
Experts insist on the need for immediate action, emphasizing that even without full legislative regulation, effective methods for detecting and curbing illegal activities in the crypto sphere can already be applied.
“Legislation is not a prerequisite for action,” RUSI concluded, calling for the development of public-private partnerships and the use of private tools to detect and curb illegal activities.
According to the Bureau of Economic Security of Ukraine, from 2013 to 2023, the state lost about 3 billion hryvnias in taxes from cryptocurrency exchanges established by Ukrainian residents. Additionally, according to the Ukraine Economic Outlook report, from 2016 to 2022, Ukraine lost $48.8 billion in direct revenues and about $4 billion in tax revenues due to the lack of regulation of the cryptocurrency market. An analysis by Global Ledger for the Ministry of Digital Transformation indicates that in the last four years alone, the state has lost 8.34 billion hryvnias in taxes, of which between 1.31 and 6.53 billion hryvnias in personal income tax could have been collected from users of a single centralized exchange.