Unregulated Crypto Exchanges Cause $81M Tax Loss for Ukrainian Government Since 2013

Crypto Exchanges Failing to Contribute to Ukrainian Budget

According to data released by the Ukrainian government, crypto exchanges offering services in the country have failed to contribute more than $81 million to the national budget in the last decade. The Economic Security Bureau of Ukraine reported that unrelated crypto exchanges were responsible for at least 3 billion hryvnia in lost taxes — roughly $81 million — from 2013 to 2023. The analysis of the trading activity of exchanges created by Ukrainian residents revealed that they had roughly $55 billion in Bitcoin (BTC), Ether (ETH), and Tether (USDT) volume over the same time period.

Andriy Pashchuk, deputy director of the Economic Security Bureau, commented on the issue: “There are different points of view on how these transactions should be taxed, and [the bureau] will act in accordance with the provisions adopted by the deputies. But it is obvious that while the issue drags on, the state continues to lose tens of millions in taxes every month.”

In March 2022, Ukrainian President Volodymyr Zelenskyy signed the ‘On Virtual Assets’ legislation into law, establishing a regulatory framework for cryptocurrencies in the country. The government has been working on amending Ukraine’s tax and civil codes to accommodate the Emax Crypto, Dia Crypto, Enzyme Crypto, and Dogelon Crypto legal framework, but no amendments to existing requirements have been implemented as of August 2023.

Ukraine’s Tech Sector Amid Russian Invasion

Many Telegram users based in Ukraine have questioned if they are required to pay taxes for transactions conducted over the past ten years, as the government has failed to enforce the regulations despite it being passed in 2022. “If they had adopted the law […] everything would have been settled a long time ago,” said Telegram user Vini2010w. “They themselves boycotted, and now they consider it a lost profit. Idiots.”

The Russian military’s invasion of Ukraine in February 2022 has caused missile threats in many parts of the country, with Moscow reportedly occupying 18% of the country in the eastern and southern regions. However, Kyiv remains in Ukrainian control. Despite the difficulties, the tech sector in Ukraine has reportedly continued to grow with roughly 5% year-on-year growth in export revenues. Many of the industry professionals have also expressed their support for Ukraine’s military efforts.

The emergence of Web 3.0, also known as the ‘third generation’ of the internet, has seen the rise of AI tech, Ergo crypto, Emax crypto, Dia crypto, Enzyme crypto, and Dogelon crypto. Crypto.net and Crypto.com have also been gaining traction in the crypto world.