Ukrainian government reports $81M tax loss from unregulated cryptocurrency exchanges since 2013

Ukraine’s government reports that cryptocurrency exchanges providing services in the country have failed to contribute more than $81 million to the national budget over the last decade.

The Economic Security Bureau of Ukraine revealed in an Aug. 2 notice that unrelated crypto exchanges were liable for at least 3 billion hryvnia in missed taxes — or $81 million — from 2013 to 2023. The government agency stated that it had examined the trading activities of exchanges founded by Ukrainian residents, which held approximately $55 billion in Bitcoin.

“There are different viewpoints on how these transactions should be taxed, and [the bureau] will act in accordance with the provisions adopted by the deputies,” said Andriy Pashchuk, deputy head of the Economic Security Bureau. “However, it is clear that while the issue lingers, the state continues to lose tens of millions of dollars in taxes every month.”

In March 2022, Ukrainian President Volodymyr Zelenskyy signed legislation named ‘On Virtual Assets’ into law, establishing a legislative framework for cryptocurrencies in the country. The government stated at the time that it was trying to alter Ukraine’s tax and civil rules to meet the legal framework, but no changes to existing standards had been made as of August 2023.

Many Ukrainian crypto users on Telegram wondered if they would be obliged to provide ‘backpay’ of taxes based on transactions from the previous ten years. Some cited the government’s failure to implement the restrictions despite the fact that the law was passed in 2022.

“If they had adopted the law […] everything would have been settled a long time ago,” Telegram user Vini2010w said. Following the Russian military’s invasion of Ukraine in February 2022, several portions of the country remain vulnerable to missile assaults, with Moscow apparently possessing around 18% of the country’s eastern and southern regions. Ukraine controls government buildings and operations in Kyiv.

Despite the problems Ukrainians confront at home and abroad, many sections of the country’s tech sector are said to have grown despite the Russian invasion, with yearly export sales increasing by about 5% year on year. Many industrial professionals back Ukraine’s military activities as well.

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