Alexander Bornyakov, Deputy Minister of Digital Transformation of Ukraine, stated that the Ministry of Digital Development of Ukraine does not recognize cryptocurrencies as a means of payment and will not pose a threat to the traditional economy.

Cryptocurrency exchanges operating in Ukraine have reportedly failed to contribute over $81 million to the national budget in the past decade, according to data from the Ukrainian government's Economic Security Bureau. The bureau analysed trading activity of exchanges created by residents of Ukraine, which had approximately $55 billion in Bitcoin, Ether and Tether volume from 2013 to 2023. Despite the passing of a regulatory framework for cryptocurrencies in the country in March 2022, no amendments to existing tax requirements have been implemented as of August 2023. Some Ukraine-based crypto users have questioned whether they will be required to provide 'backpay' of taxes based on transactions over the last ten years.

According to a report by blockchain intelligence firm Crystal Blockchain, Ukraine has received $225 million in cryptocurrency donations since the start of Russia's invasion last year. These donations have been used to purchase crucial war supplies such as weapons, ammunition, and medical equipment. While the total amount of crypto donations has continued to increase, the monthly donation amounts have stagnated since late 2022 and never exceeded $10 million a month since May 2023. The majority of donations were in the form of USDT, followed by ether and bitcoin, and were primarily for humanitarian initiatives rather than military-oriented campaigns. On the other hand, Russia's military and paramilitary units have also been using crypto to receive material support, but these fundraising efforts have been more clandestine and have raised much smaller amounts.

June 22 (Cointime) - A Russian citizen from Khabarovsk Krai has been arrested by the FSB for allegedly sending cryptocurrency to the Armed Forces of Ukraine. The individual is being charged with treason and was caught using cryptocurrency tools to transfer personal funds via third parties in Ukraine.

June 21 (Cointime) - The State Bureau of Investigation in Ukraine has discovered an illegal cryptocurrency mining farm in a state-owned enterprise in Lviv. The farm was being run by managers of a branch of the state-owned company Forests of Ukraine in Rava-Ruske, who had mined over $108,000 and consumed $41,000 worth of government resources.

Ukraine's National Anti-corruption Bureau (NABU) has announced its collaboration with the US Embassy to investigate the crypto sector for money laundering activities. The NABU stated that it will be financially supported by the US State Department's Bureau of International Narcotics and Law Enforcement Affairs. Over 250 detectives and analysts will be studying cryptoassets as part of a nine-month training program covering cryptocurrency technologies and methods of investigating crimes using cryptoassets. The NABU aims to establish channels of cooperation and interaction with key Ukrainian and global crypto exchanges and international law enforcement organizations to ensure that cryptocurrency will no longer be a "panacea" for corrupt individuals.

As countries continue to face issues such as inflation, unstable currencies, and financial control, the demand for crypto assets is on the rise. Pakistan has recently announced that they will not be legalizing cryptocurrencies to avoid penalties from the Financial Action Task Force (FATF), despite the organization urging regulation instead of a complete ban.

The Internal Revenue Service (IRS) is collaborating with blockchain analysis firm Chainalysis and Ukrainian investigators to trace Russian individuals suspected of using cryptocurrency to conceal their assets following Russia's invasion of Ukraine. The IRS is sponsoring Ukrainian investigators' access to a Chainalysis tool that could be used in crypto-related probes. The agency aims to improve information-sharing and case development between the US and Ukraine by collaborating with counterparts overseas to pursue sanctions evaders. The IRS has ramped up its focus on cryptocurrencies, citing that it's susceptible to financial frauds like money laundering, market manipulation, and tax evasion.

The Ukrainian authorities, in collaboration with the US government, have reportedly shut down nine cryptocurrency exchanges that were operating illegally. The exchanges were accused of facilitating money laundering and illegal activities and were allegedly being used by criminals to launder the proceeds of their crimes. The Ukrainian authorities have been cracking down on illegal cryptocurrency activities in recent years, with the aim of promoting a safe and secure environment for cryptocurrency users in the country. The shut down of these exchanges is seen as a positive step towards achieving this goal.

Ukraine is reportedly working on new crypto regulations inspired by the EU Markets in Crypto-Assets (MiCA), with the aim of implementing them before the end of the year. The National Commission on Securities and the Stock Market, the Ministry of Digital Finance, the National Bank of Ukraine, and MPs are currently working on the plan. The Verkhovna Rada's Financial Committee is also working on proposals in conjunction with law enforcement agencies, with input from EY and USAID Financial Sector Reform. The central bank will have the final say on the bill, which will likely include spelling out legal terms for cryptoassets and focusing on taxation-related matters. Traders would likely be obliged to pay capital gains tax on crypto-to-fiat sales only, with crypto-to-crypto trades not subject to any taxation.