Public officials are declaring cryptocurrency more actively every year. In 2.2 thousand declarations submitted last year, crypto-assets worth UAH 786 million were indicated. This is evidenced by the data of the Unified State Register of Declarations of Persons Authorized to Perform the Functions of the State or Local Self-Government (Register of Declarations).
The number of declarants indicating funds in cryptocurrency increases annually:
- for 2022 — in 1.32 thousand declarations — UAH 371 million;
- for 2023 — in 1.71 thousand declarations — UAH 526 million;
- for 2024 — in 2.2 thousand declarations — UAH 786 million.
Cryptocurrency is one of the modern methods of storing and investing funds. At the same time, some declarants attempt to use it to “conceal” illegally acquired assets.
The National Agency on Corruption Prevention (NACP), within the framework of full verifications of declarations, carries out verification of declared crypto-assets in the blockchain network and establishes their actual ownership by the declarant or their family members. For this purpose, the Agency has the necessary technical and analytical tools and closely cooperates with the Cyberpolice Department of the National Police of Ukraine.
The most common violation in the declaration of cryptocurrency is the impossibility of confirming its existence. Often, officials declare significant crypto-assets without providing confirmation of their reality: there are no verified cryptocurrency wallet addresses, exchange statements, or even screenshots. Usually, it concerns assets which, according to the declarants, were acquired many years ago for symbolic sums. Declaring non-existent assets is a deliberate violation, which cannot be explained by inattention or ignorance of the rules.
Among the most frequent explanations of declarants who indicated unconfirmed cryptocurrency are the loss of access to a wallet due to a forgotten password, theft of a hardware device, or loss of a physical key. However, they provide no documentary evidence, although modern crypto-wallets usually provide mechanisms for recovery. Another common explanation is the purchase of assets for cash from unidentified persons or illegal services without any supporting documents.
In addition to declaring unconfirmed assets, a widespread type of violation is the submission of inaccurate data regarding real cryptocurrency assets: their value, quantity, and date of acquisition. Declarants often rely on the market rate as of December 31 (end of the reporting period), which is incorrect. According to the Law, the declaration must state the value of the asset based on the actual expenses for its acquisition. There are also cases of deliberate undervaluation of the acquisition price in order to avoid additional questions regarding the origin of funds.
The Agency wrote here about the detected signs of declaring inaccurate information about cryptocurrency.
Furthermore, based on the results of full audits of declarations, NACP also detected other cases, in particular:
- The former head of the State Migration Service Office in Odesa region, in the declaration for 2023, indicated inaccurate information about 37 Bitcoin (BTC) belonging to his wife, worth more than UAH 57.7 million, which he could not confirm. His wife explained that she had received the cryptocurrency as a gift before meeting the declarant; however, such explanations were refuted during the full verification of the declaration. The State Bureau of Investigation (SBI), conducting a pre-trial investigation, served him with a notice of suspicion under Article 366-2 of the Criminal Code of Ukraine (CC of Ukraine).
- The former head of the South-Eastern Interregional Department of Justice (Dnipro) in his annual declaration for 2021 indicated income from the sale of cryptocurrency amounting to more than UAH 2.5 million. According to him, he received these funds as a result of alienation of a digital asset at a currency exchange office.
However, during the full verification, it was found that the actual receipt of the declared funds had not occurred. Moreover, the declarant could not provide any documents confirming the very fact of alienation of the cryptocurrency.
In this regard, SBI investigators are checking whether the submission of false information in the declaration was intentional and whether it could have been an attempt to conceal other financial transactions.
- The Deputy Director of the State Enterprise “Hall of Official Delegations” in the declarations for 2022 and 2023 indicated ownership of 10 Bitcoin (BTC) worth more than UAH 5.8 million. The official did not provide supporting documents regarding the declared asset, while also stating that he had made a mistake while filling out the declarations. The declarant’s explanations were refuted during the full verification. The National Police of Ukraine is conducting a pre-trial investigation under Article 366-2 of the Criminal Code of Ukraine.
We remind you that explanations on how to properly declare cryptocurrency and how to confirm it are available in our Knowledge Base.
Note: according to Article 62 of the Constitution of Ukraine, a person is considered innocent of committing a crime and cannot be subjected to criminal punishment until their guilt has been proven in accordance with the law and established by a guilty verdict of the court.
More results of full audits of declarations and relevant reports can be found in the section “NACP Activity Results.”
