Ukraine has lost at least $10 billion to crypto-related crimes through stolen funds, tax evasion, and money laundering, according to a Royal United Services Institute (RUSI) report. The UK-based security think tank warned that without urgent reform, the country could become a permanent hotspot for crypto-enabled crime, with much of it linked to Russian networks.
The report identified over-the-counter (OTC) crypto trades, illegal financing, and money mule networks as some of the main risks. It highlighted how increased OTC activity has introduced serious national security and financial crime risks for the nation. It stated, “These services are increasingly used to circumvent international sanctions, including the procurement of dual-use components for the Russian armed forces. “
Moreover, as per RUSI’s estimates, money mule schemes, also known as ‘drops’ schemes in the country, could be robbing Ukraine of almost $24 million every month. In 2024 alone, banks closed down more than 80,000 mule accounts. Drug trafficking through social media, mainly via Telegram, which accepts cryptocurrency payments, also poses a threat to national security.
Ukraine began regulating crypto in 2018, with the Law on Virtual Assets passed just before the 2022 Russian invasion. However, implementation stalled due to the lack of an accompanying taxation law. Under its EU accession process, expert recommendations state that Ukraine must harmonize its virtual asset laws with EU standards by late 2025 and improve compliance with FATF anti-money laundering rules.
RUSI has also advised Ukraine to seek to attract stablecoin projects, set strict compliance regulations, and recognize that there is a faint boundary between cybercrime and illegal finance. It also shared that failure to take action could allow Russia-based financial networks to further manipulate Ukraine and stifle genuine innovation in the crypto industry.
Ukraine blocked 19 Russian crypto miners, 17 digital asset operators, and five exchanges in a recent crackdown, an improvement but not sufficient to cut the bigger threat.
The report presents a clear picture: Ukraine may lose its potential as a legitimate crypto hub and continue to suffer politically and economically if legislative and financial reform is not implemented quickly.
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