Ukraine Aims to Tax Crypto Amid $10B in Illicit Losses and Global Pressure

The Verkhovna Rada, Ukraine’s parliament, passed the first reading of a bill to regulate and tax cryptocurrency on Sept. 3, with 246 lawmakers voting in favor. The legislation marks a pivotal step in formalizing Ukraine’s digital asset economy, which has one of the world’s highest rates of cryptocurrency adoption. The draft law proposes an 18% income tax and a 5% military levy on profits from virtual assets, with a temporary 5% rate for fiat conversions during the first year of implementation. This preferential rate aims to ease the transition for users and businesses adapting to the new regulatory framework [1].

The proposed tax structure aligns with Ukraine’s financial regulator’s April 2025 recommendation, which suggested a 23% combined tax rate and initially exempted certain crypto-to-crypto and stablecoin transactions. This move positions Ukraine closer to countries with more crypto-friendly policies while addressing longstanding regulatory gaps. Lawmaker Yaroslav Zhelezniak emphasized that the bill is still a work in progress, with significant changes expected before the second reading. He also noted the uncertainty surrounding the regulatory body, which could either be the National Bank of Ukraine or the National Securities and Stock Market Commission [1].

The urgency for reform is underscored by the financial vulnerabilities stemming from insufficient crypto regulation. The Royal United Services Institute (RUSI) reported that Ukraine has lost at least $10 billion in illicit flows due to weak oversight, including money laundering and cyber-enabled crime. These vulnerabilities have turned the country into a growing hub for financial exploitation, with domestic criminal networks using “money mule” schemes to launder millions monthly. Telegram-based drug trafficking operations and Russian-linked laundering activities have further complicated the landscape, prompting calls for immediate reform [2].

Ukraine’s crypto adoption is among the highest globally, placing it eighth in Chainalysis’s 2025 Global Cryptocurrency Adoption Index. The country’s high rankings in DeFi value received and centralized value flow highlight its significance in the digital economy, particularly in Eastern Europe. Volodymyr Nosov, CEO of WhiteBIT, emphasized that the proposed legislation could attract crypto investments and facilitate the repatriation of Ukrainian crypto assets, potentially aiding economic revitalization. However, implementation remains conditional on parliamentary approval and regulatory clarity [1].

The push for crypto legislation aligns with broader global trends in crypto taxation. Countries such as Denmark, Brazil, and the United States have recently introduced or debated new tax frameworks for digital assets. In 2024, Denmark proposed a tax on unrealized crypto gains, while Brazil ended a crypto tax exemption and introduced a 17.5% flat tax rate. In the U.S., legislative discussions on crypto taxation are ongoing. Ukraine’s efforts to align its policies with these developments come amid EU accession requirements, which mandate compliance with European standards by the end of 2025 to avoid potential financial sanctions [2].

Source:

[1] Ukraine's Parliament Supports Crypto Tax Bill at First Reading (https://cointelegraph.com/news/ukraine-crypto-legalization-taxation-bill-first-reading)

[2] Ukraine Parliament Passes First Reading of Crypto Legalization Bill with 23% Tax Rate as Country Faces $10B Losses from Illicit Flows Amid Wartime Vulnerabilities (https://finance.yahoo.com/news/ukraine-parliament-passes-first-reading-102435792.html)

[3] Russia and Ukraine Fall in Chainalysis Cryptocurrency Adoption Rankings (https://forklog.com/en/russia-and-ukraine-fall-in-chainalysis-cryptocurrency-adoption-rankings/)

[4] Ukraine's Parliament Backs Bill to Legalize, Tax Virtual Assets in First Reading (https://kyivindependent.com/parliament-backs-draft-law-to-legalize-tax-virtual-assets-in-first-reading/)