Ukraine Loses Over $10B Amid Lax Crypto Regulation, RUSI Reports

Ukraine has lost at least $10 billion due to the lack of comprehensive regulation in its cryptocurrency market, according to a report by the Royal United Services Institute (RUSI). Key risks include over-the-counter (OTC) crypto trades, money mule schemes costing the country an estimated $24 million monthly, and the use of Telegram for illicit activities such as drug trafficking and sanction evasion to fund the Russian military. Despite the 2022 Law on Virtual Assets, implementation has stalled due to unresolved taxation issues, and no regulatory authority has been designated yet. Ukraine faces the urgent need to align its crypto regulations with EU standards by the end of 2025 to avoid downgrades by the Financial Action Task Force (FATF) and to prevent becoming a permanent hub for crypto-enabled crime. Experts warn that failure to act could allow Russia-based financial networks to exploit Ukraine further, undermining national security and stifling legitimate innovation. The report calls for clear rules, licensing, transparency, and stronger oversight to recover lost revenues and secure the crypto market.