The shadow of ‘PrivatBank’, a billion-strong miscoding scandal and thousands of ‘drops’: what lies behind the scenes of Monobank’s popularity

The shadow of ‘PrivatBank’, a billion-strong miscoding scandal and thousands of ‘drops’: what lies behind the scenes of Monobank’s popularity

Monobank, one of Ukraine’s most successful and popular neobanks, has found itself at the center of several serious scandals. Notably, the project was created by people from the PrivatBank team — the very same top managers who, after the nationalization of the state-owned bank in 2016, left and launched a new financial project under the Monobank brand (legal entity — JSC “Universal Bank”).

Among the key figures are Oleksandr Dubilet (former IT director of PrivatBank), Volodymyr Yatsenko (former deputy chairman of the board), and Lyudmyla Shmalchenko (former treasury director). All three are currently wanted by NABU in a high-profile case involving the withdrawal of funds from PrivatBank.

Despite rapid growth and millions of clients, in recent years Monobank (Universal Bank) has repeatedly come under the scrutiny of regulators and law enforcement. In this article, we have compiled the main schemes mentioned in open sources and investigations: miscoding of payments through the liquidated iBox Bank, large-scale tax optimization via a related company, and issues with so-called “drop accounts.”

Miscoding scheme

Until March 2023, JSC “iBox Bank” was Monobank’s exclusive partner for instant card top-ups via iBox terminals. In 2023, the NBU revoked the bank’s license and liquidated it for systematic AML/CFT violations: miscoding payments in favor of illegal online casinos. This was done through the bank’s co-owner Ihor Khmelov (call sign “Shmel” in NABU wiretaps), who, according to the investigation, together with the shareholders, created a money-laundering scheme involving more than 20 controlled companies that opened accounts at the bank.

Khmelov is a long-time business partner of producer Tymur Mindich. The case also involves three Russian citizens (from St. Petersburg and Moscow) who previously participated in fraudulent schemes with Canadian investors. Khmelov also serves as a top executive at Fire Point — the developer of the “Flamingo” cruise missile and one of the largest contractors of the Ukrainian Ministry of Defense (~$1 billion in contracts, about 10% of defense procurement in 2024). Fire Point is mentioned in NABU’s “Midas” case on suspicion of inflating the cost of state orders for UAVs.

Tax optimization

The loudest scandal concerns tax optimization. Since the end of 2023, banks have been subject to an increased corporate profit tax rate of 50%. “Universal Bank” began massively shifting Monobank’s revenues to LLC “Fintech Bend” (where the tax rate is 18%) in the form of payments for IT services, marketing, and app management. Estimates suggest that at least UAH 2.5 billion was withdrawn from the bank in 2023. This allowed savings of approximately UAH 750 million in taxes (the difference between 50% and 18%). Critics describe it as a classic scheme of shifting profits to a related company with a lower tax rate. Gorokhovsky and Tihipko themselves have not publicly commented on the investigation.

Drops at Monobank

In 2024, PrivatBank and Monobank (Universal) closed 80,000 drop accounts in six months — the highest figure among Ukrainian banks. In March 2025, the BEB named Monobank (Universal) among 12 banks where drop accounts were opened; the total annual volume of drop transactions in the system amounted to about UAH 200 billion.

In December 2023, the NBU fined Universal Bank (Monobank) UAH 10.451 million for AML violations (drops, suspicious clients). In October 2025, the bank was fined UAH 27.3 million: inadequate client verification and failure to report suspicious transactions in a timely manner.

These are not the only schemes of the Horokhovskyi group that will be covered later.