How officials who hide bitcoins from the Ukrainian tax authorities will be punished

How officials who hide bitcoins from the Ukrainian tax authorities will be punished

Ukrainian officials are falsely declaring cryptocurrency to hide their dubious wealth. In particular, unscrupulous officials were found in Mykolaiv, Donetsk, and Vinnytsia regions, and now face fines or imprisonment.

This was reported by the National Agency for the Prevention of Corruption (NAPC). The discrepancy between the existing property and the declared data was revealed as a result of a full check of the declarations.

“Unscrupulous officials, trying to come up with new ways to hide their dubious wealth, often reflect in the declaration false information about cryptocurrency - its availability, date of acquisition, quantity and value of digital assets. Or they do not indicate information at all about their ownership, since they have no confirmation the legality of the sources of funds for their acquisition,” noted the NAPC.

In particular, the deputy head of the Regional Service Center of the State Center of the Ministry of Internal Affairs in the Mykolaiv region in 2021 and 2022 declared bitcoins with a total value of UAH 100 million and UAH 48 million, respectively. However, he could not confirm the presence of cryptocurrency, explaining this by the theft of a cold crypto-wallet and the key to it. The official also provided documents regarding another part of the asset, but this confirmed the veracity of the declared information.

An employee of the Donetsk Regional Prosecutor’s Office in the declaration for 2022 indicated false information about cryptocurrency worth UAH 22.5 million - in particular about the presence, quantity and value of his numerous digital assets, and he completely forgot to mention some. He explained that part of the cryptocurrency was given to him by a crypto exchange operating in test mode, not connected to the blockchain, and the indicated price of the cryptocurrency was an advertising campaign of the exchange to attract customers, and not the real price.

In the declaration for 2021, a deputy of the Vinnytsia City Council indicated that a member of his family had 20 BTC worth more than UAH 2 million and DOT worth almost UAH 7.5 million. During a full check, he was unable to confirm this, and his relative provided a screenshot that does not allow us to establish the veracity of the information specified in the declaration. He also noted that access to the asset on the specified exchange is currently lost. Based on the results of a full audit, it was established that false information was displayed for a total amount of UAH 12 million.

Against this background, criminal proceedings were initiated on the grounds of an offense under the article “Declaration of false information” (Part 2 of Article 366-2 of the Criminal Code of Ukraine). If found guilty, the defendants face a fine or up to two years in prison.