Economic Security Bureau of Ukraine Investigating Crypto Exchanges for Tax Avoidance
The Economic Security Bureau of Ukraine (ESB) is currently conducting a pretrial investigation against local cryptocurrency trading platforms suspected of tax avoidance. The investigation comes in response to the discovery that non-regulated exchanges in Ukraine have resulted in the loss of over $80 million in tax revenue. The head of ESB, Andriy Pashchuk, stated in an interview that the investigation is focused on trading platforms with Ukrainian beneficiaries. To trace crypto operations, analysts at ESB are using data services such as Chainalysis and Crystal Blockchain, in addition to OSINT insights to estimate total crypto turnover in digital wallets on Ukrainian exchanges. However, Pashchuk did not provide specific details about the progress of the investigation.
Cost to Ukraine’s Budget and the Lack of Accusations
ESB issued a statement in August 2023, revealing that Ukrainian crypto exchanges collected $445 million in trading fees within the past decade. The bureau estimates that trades involving Bitcoin, Ethereum, and Tether during the period from 2013 to 2023 reached a total volume of over $55 billion. The unregulated activities of these exchanges are believed to have cost the Ukrainian budget approximately 3 billion Ukrainian hryvnia (around $81.2 million). However, ESB has not accused any specific exchange of wrongdoing at this time.
Hot Take: Ukrainian Authorities Cracking Down on Crypto Tax Avoidance
Ukraine’s Economic Security Bureau is taking action against crypto exchanges suspected of avoiding taxes. By investigating non-regulated platforms and using advanced data services, the bureau aims to trace crypto operations and estimate lost tax revenue. The substantial amount of money involved highlights the potential impact of tax avoidance in the crypto market. It is a reminder that authorities around the world are becoming more vigilant in monitoring the industry and holding accountable those who evade their tax obligations. As cryptocurrency continues to gain popularity, we can expect to see increasing scrutiny and regulation. Crypto traders and exchanges should ensure compliance with tax laws to avoid legal trouble and contribute to the economic health of their respective countries.
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