Ukraine is expected to legalize crypto in early 2025 and its taxation will follow the model used for securities. This is according to the Head of the Ukrainian Parliament Committee for Finances, Tax and Customs Policy, Danylo Hetmantsev.

As reported by local outlet Ukrainska Pravda, a draft law on the taxing of virtual asset transactions in Ukraine was registered in the country’s parliament in November last year. The adoption of this document would mark a significant step toward the legalization of cryptocurrencies in Ukraine.

Speaking at a forum on domestic investment in Ukraine, Hetmantsev said, “If we’re talking about cryptocurrency, the [parliament’s] working group is finalizing a draft law for its first reading.

“I believe the text, developed in collaboration with the National Bank and the IMF, will be ready after the New Year. We aim to pass this law and legalize cryptocurrency in 2025’s first quarter.”

Read more: Michael Saylor says he’s paying bitcoin taxes, unlike ‘crypto-anarchists’

Hetmantsev also noted that crypto taxation will follow the model used for securities. In other words, profits will be taxed when assets are converted into currency.  

“In consultations with European experts and the IMF, we are taking a very cautious approach to using cryptocurrencies for tax exemptions, as it could potentially facilitate tax evasion in traditional markets,” he explained.

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In the quiet streets of Komsomolsk-on-Amur, a city in Russia’s Far East, an unidentified man has reportedly been arrested on suspicion of high treason for sending cryptocurrency to Ukraine’s armed forces.

The crypto was allegedly sent to Ukraine’s military with the intent to “purchase weapons, ammunition, and uniforms,” according to state-owned Russian outlet Izvestia.

Russia’s top intelligence agency, the Federal Security Service (FSB), shared a video of the arrest on Wednesday. It depicts several agents rushing out of a vehicle and pinning the man to the ground with his arms behind his back. He’s then handcuffed, detained, and interviewed.

Read more: No, a crypto CEO wasn’t arrested for smuggling 20,000 condoms

Russian man accused of sending crypto to Ukraine may get hefty sentence

This arrest marks the latest in a string of charges against alleged Ukraine supporters. The day prior, on September 17, a man in Mariupol was also arrested for high treason. He’s accused of sharing sensitive information with Ukraine’s intelligence agency about the location of Russian troops and units, with the intent to eliminate them.

It remains unclear what sentences these unidentified men may receive if found guilty. However, two weeks ago, physicist Alexander Shiplyuk received 15 years in prison after being found guilty of “state treason.” The private trial found that while Shiplyuk was working on Russia’s hypersonic missile program in 2017, he shared classified information at an overseas conference with German intelligence. Shiplyuk denied the charges, and reportedly refused a plea deal.

The physicist’s colleague, 77-year-old scientist Anatoly Maslov, was similarly accused. Despite denying all allegations, he was sentenced to 14 years in prison back in May. If he survives, Maslov will be 90 years old upon his release.

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While EOS is rarely mentioned as a blockchain with a real-world use case, the cryptocurrency has proven to be very useful in the latest extradition of an Uzbek national living in Ukraine: Nikita Sklyuev, also known as Valeriy Dorojkin, was finally extradited this week to face charges related to wire fraud from 2019.

According to documents from the 2019 charges, Sklyuev created a fake EOS wallet explorer that was able to access the private keys of a user who held over two million EOS — valued at $11.8 million at the time — and move the crypto onto Binance and Bitfinex, where he then traded into Ethereum and eventually cashed out.

Over half the stolen EOS has not been touched yet and is currently valued at about $640,000 — a decline of 86% from when it was hacked.

Sklyuev hacked the ‘Hodgetwins’ — a Republican-leaning comedy duo with millions of followers — back in 2018 according to an old Steemit post.

Read more: How wire fraud, not securities violations, lands crypto criminals in prison

Uzbekistan, Ukraine, and the Western District of New York

It’s unclear what the 37 year-old Uzbek national was doing in Ukraine, but his presence in the Western-aligned nation certainly made his extradition easier.

Sklyuev arrived in the US on June 20th, with his mugshot circulating on Facebook upon his arrival.

Sklyuev faces up to 20 years in prison and a fine of $250,000 — though he is likely to spend less than 20 years behind bars.

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Ukraine National Police have raided a criminal call center network that promised phony crypto investments to unsuspecting victims, seizing luxury cars and arresting an individual with links to a so-called ‘thief in law.’ 

According to a translated announcement from Ukrainian police on Monday, authorities detained 14 suspects accused of defrauding victims across Ukraine, Moldova, Kazakhstan, and the European Union. 

Following 40 searches across Ukraine, authorities seized 12 luxury cars, 136 units of computer equipment, 951 SIM cards, and funds totaling $64,500.

As part of the operation, scammers called victims pretending to be employees at a stock exchange and, using ‘psychological techniques,’ persuaded them to invest personal funds into crypto. They then transferred the stolen funds to criminally controlled digital wallets and bank cards. 

Read more: Europol raids money mules who laundered $10M for crypto scammers

Two detained suspects, a 49-year-old and a 51-year-old, are believed to have organized the network of call centers and hired the 12 other members.

Each accomplice is said to have had their patch entrusted to them and been given responsibility for planning the fraud, hiring personnel, and gathering information on their ‘clients.’ They additionally distributed funds among their group with police claiming that some decided to replenish the ‘criminal community.’

Authorities claim an organizer of the Ukraine crypto call center worked as a confidant for a so-called ‘thief in law’ nicknamed ‘Khmyelo.’ The term thief in law is taken from the Russian ‘Vory v Zakone,’ and is a slang term for a senior member of a criminal organization. 

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A UK crypto firm allegedly used to dodge sanctions reportedly sent $4.2 million in crypto to a known member of an international Russian arms dealing network before he was sanctioned by the US. 

Crypto infrastructure firm Copper reportedly sent millions to the crypto wallet of Jonatan Zimenkov, an Israel-born Russian national accused by the US Office of Foreign Assets Control (OFAC) of helping his father Igor Zimenkov, avoid sanctions and run an arms dealing collective.

Igor Zimenkov is alleged to be the leader of the Zimenkov network, which is accused by the OFAC of selling military equipment to third-world countries on Russia’s behalf while supporting defense entities key to Russia’s military-industrial complex.

“Igor and Jonatan Zimenkov both had direct correspondence with sanctioned Russian defense firms. They have additionally been involved in multiple deals for Russian cybersecurity and helicopter sales abroad,” the OFAC sanction reads.

The Guardian and International Consortium of Investigative Journalists (ICIJ) found Copper sent Zimenkov 1,700 ETH in May 2021, worth $4.2 million, by linking his address to those sanctioned by the US. Both outlets report that the arms network was active for several years before the US issued Zimonkov’s sanction in 2023.  

Copper wasn’t obligated to perform checks

The Guardian admitted that it doesn’t know the purpose of the transactions or where the funds came from and it clarified that it’s not suggesting Copper breached any sanctions. It also claims that Zimenkov isn’t a client of Copper, absolving the firm of any legal obligation to perform any checks at the time. 

A Copper spokesperson told the Guardian it “takes its compliance, legal and regulatory obligations very seriously, and has acted in full compliance with all applicable regulatory standards, including all applicable sanctions prohibitions, in the UK.” 

Copper reportedly didn’t answer any questions inquiring about its relationship with Zimenkov, who also refused to comment when approached by the Guardian. 

Copper reportedly helped oligarch dodge sanctions

Copper, previously advised by former UK chancellor Sir Phillip Hammond, was reported last year to have helped a Russian oligarch evade US sanctions. 

Read more: For crypto and Russia: Spy ring guilty of Ukraine espionage

The Guardian claims that the crypto firm acted as an intermediary for Mikhail Klyukin when he sold his 2% of Copper shares, worth £15 million ($19 million) in May 2022. 

A Copper spokesperson denied the claim that it acted as an ‘intermediary’ for Klyukin’s share sale and claimed it intended to divest shares in Copper held by a company associated with a sanctioned individual.

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A 29-year-old alleged cryptojacking “mastermind” was arrested by Ukraine and Europol last week and accused of mining $2 million worth of crypto using stolen computational power.

According to a press release from Europol, the suspect was arrested on January 9 in Mykolaiv after an unnamed cloud provider tipped off authorities after its user accounts had been compromised.

The provider, Europol, and Ukrainian authorities then worked together to investigate the scheme.  

According to The Register, three properties were raided during the investigation and the alleged miner is currently being held in Ukraine under judicial secrecy. The cloud provider also remains unnamed.

Read more: Illegal crypto mining rigs found in Poland’s Supreme Administrative Court

Cryptojacking is essentially the unauthorized access of computing infrastructure by malicious actors who want to redirect computational power to crypto miners. Through this process, cryptojackers can avoid paying costly bills and pass them on to the targeted cloud providers. 

Indeed, according to a 2022 threat report from Sysdig, cited by The Register, cryptojackers reportedly make $1 in profit for every $53 in victim-paid bills. Using this estimate, the 29-year-old in question could potentially have cost providers $106 million in bills.

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Poland has found a spy ring made up of 14 citizens from across Russia, Belarus, and Ukraine guilty of espionage after accepting crypto payments of up to $10,000 to derail trains and monitor military targets in support of Russia.

According to the Agence France-Presse, a Polish court found the spy ring guilty of acts of espionage on Tuesday. The spies planned to derail supply trains en route to Ukraine while also monitoring military targets. Additionally, they were ordered to distribute Russian propaganda, burn homes, and beat people.

“After examining the case… the court found all the defendants guilty of the crimes charged, and found some of them to be operating within an organized criminal group,” said judge Jaroslaw Kowalski.

Russian spies earned $10K to derail critical trains to Ukraine

The spy ring was partly made up of “two Ukrainian lawyers and a political scientist, a French language teacher, a pharmacy technician, (and) a software engineer.”

At least six cameras were found to have been installed by the group, though they ordered many more. These were set up with their own power supplies and communication capabilities, and were operable via mobile phone. This allowed the spies to constantly monitor air, rail, and military transports critical to the invasion of Ukraine.

Among these were the naval port in Gdynia, border crossings, and key railway lines used for weapons and humanitarian aid into Ukraine, Polish media reports.

Read more: Ex-NSA worker sold gov’t secrets for crypto to benefit Russia

Members of the spy ring reportedly accepted payments between $300 and $10,000 worth of cryptocurrency for various tasks. Putting up a pro-Russian poster would grant $5, mounting a camera earned them $300 to $400, and they would receive $10,000 for derailing a train. Their orders came from Russia via Telegram. 

A Russian ice hockey player was also involved and reportedly shared the details of critical infrastructure with Russian intelligence. His arrest in June prompted Moscow to express a “strong protest” against Poland’s actions. 

Two persons who have denied the allegations are to be tried in court.

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Ukraine’s High Anti-Corruption Court seized $1.5 million in tether (USDT), TRON (TRX), and bitcoin (BTC) yesterday from the former chief of Ukraine’s State Special Communications Service (SSSCIP) following allegations of embezzlement and money laundering.

Yurii Shchyhol was fired last week from the SSSCIP as prosecutors began probing Ukraine’s cyber security agency over the alleged misuse of $1.7 million (UAH 62 million) in state funds. 

Yesterday’s court announcement detailed how Shchyhol, alongside five others, used their position to allegedly misappropriate funds through the purchasing of “information technology tools” designed for secure data registers.

The court accuses the six suspects of working together in 2021 to organize a series of contracts that ensured they could buy UAH 223 million ($6.2 million) worth of software for UAH 285 million ($7.9 million) in state funds. 

The $1.7 million difference in funds was then allegedly transferred to overseas companies so that they could launder the funds and redistribute it among themselves.

Read more: EU teaches Ukraine police to track criminals and their crypto

Cryptocurrency amounts of 1.2 million USDT, 331 TRX, and 6.9 BTC — worth $1.2 million, $35, and $266,000 respectively — have reportedly been seized from the Shchyhol by Ukraine government anti-corruption agencies. 

According to the Kyiv Independent, Shchyhol was detained on November 23 and shortly released on bail one day later for $693,000. 

The former deputy head of the SSSCIP is also accused. He was detained on Nov 27 and will be held for two months in detention. Bail was set at $276,000.

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Police in Ukraine are being taught by EU security experts how to tackle the rising threat of crypto crime in the country. 

The training offered by the European Union Advisory Mission (EUAM) provides intelligence officers from Lviv the tools and know-how to track the flow of crypto assets, identify participants of transactions, and improve their investigative methods.

As part of the training announcement, the Ukrainian Bureau of Economic Security (BEB) also detailed how the country has lost UAH 3 billion ($81 million) in taxes over the past 10 years through unregulated crypto exchanges. 

“Currently, Ukraine lacks an appropriate regulatory framework, crypto exchanges are not regulated, and relevant regulations on the specifics of taxation of transactions with virtual assets have not been adopted,” (via BEB). 

Members of the Security Service of Ukraine, the National Police, and the Prosecutor’s Office, amongst other official departments and international experts at the seminar, all discussed the availability of open-source information and online software that can help track and solve crypto-related crimes.

A senior advisor from the EUAM noted that “tracking and tracing assets of criminals using cryptocurrencies is an extremely complex process and requires constant professional development.”

Read more: Canadian police open applications for crypto and NFT storage solution

The head of Lviv’s BEB Territorial Department said, “The emergence of cryptocurrencies has become a challenge for law enforcement not only in Ukraine but also around the world. The main task of the BEB is to protect the economy and fight economic crime.” 

He added, “Knowledge and constant exchange of experience with international partners, experts, and law enforcement officers from other countries are important for us.”

Earlier this year, Canadian police also introduced the use of crypto-tracking software Chainalysis. They also published a contract request that sought developers who could create a digital asset storage system that could be utilized by officers confiscating and tracking crypto. 

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The Russian Federal Secret Service (FSB) has charged a man in eastern Russia with high treason after he was suspected of sending cryptocurrency to Ukraine’s armed forces, according to state-owned news publisher TASS. 

The man, a resident of the Khabarovsk region, is alleged to have sent crypto to armed forces in Kyiv to help buy ammunition, medical equipment, drones, and infrared rifle scopes. 

“It was ascertained that the detainee, using cryptocurrency instruments, made transfers of personal funds via third parties residing on the territory of Ukraine to an account of a foreign charitable foundation intended for use by the Ukrainian armed forces,” Russia’s secret services told TASS.

Neither the amount nor type of crypto sent was disclosed. 

Read more: Crypto use in Russia rises as country faces sanctions and bank outages

Russian state media RIA managed to record the man being detained by a country road and capture footage of authorities searching his home. 

Under Article 275 of the Russian Criminal Code, treason in Russia warrants anywhere between 12 and 20 years in prison. As of last April, this has been updated to life imprisonment.

According to Crystal Blockchain, as of February 23, 2023, over $187 million worth of crypto has been sent to donation programs run by the government or independent entities.

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