Ukraine Lost around $53 Bln Due To Lack of Crypto Regulation Since 2016

Kuna, Ukraine’s largest crypto exchange, revealed that the crypto market has caused the country to lose revenue worth dozens of billions of dollars since 2016. 

Due to the lack of a clear regulatory framework, Ukraine’s state budget has lost $52.9 billion in revenue from taxes and other crypto-related activities since 2016, as stated in a recent study. In collaboration with Kuna, Ukraine Economic Outlook and Blockchain Association of Ukraine conducted the study.

The research also found that the crypto market has experienced an influx of “real funds” worth $331 billion since 2013.

According to Kuna, the inflow of funds increased the market capitalization by $1.2 trillion by the end of June 2023 and peaked at $2.2 trillion in 2022. 

This figure was calculated based on venture and angel deals and various offerings such as ICOs, IDOs, IEOs, and stablecoin purchases. Ukraine has been losing nearly $7.6 billion annually for the past five years due to the lack of regulatory clarity in the crypto market. This amount is $2 billion more than what the country spends on its military budget, as reported by Statista.

According to Mykhailo Kukhar, the founder and chief economist of Ukraine Economic Outlook, three factors have contributed to missed opportunities for Ukraine:

• Cheap electricity for crypto miners
• Limited investment instruments for the population
• Restricted liquidity of foreign exchange instruments within the country 

A recent report has revealed that Ukraine could have claimed up to 16-17% of the global crypto mining market share at non-preferential prices. However, due to Ukraine’s ongoing war against Russia, the country’s market share has plummeted to just 1%. 

In September 2023, crypto.news reported that the Economic Security Bureau of Ukraine (ESB) initiated a pretrial investigation against local crypto trading platforms over suspected tax evasion, which has resulted in the loss of $80 million in taxes for the country.