On 8 July, 50 experts from Ukraine’s public and private sectors, as well as international specialists, convened in Warsaw. The event, organised by the Center for Financial Integrity in cooperation with the Centre for Finance and Security (CFS) at RUSI, featured three practical sessions focused on the legal framework for virtual assets, risk and illicit activity assessment, and international practices and recommendations.

Discussions centred on the current state of virtual asset regulation, including Draft Law No. 10225-D, which consolidates earlier legislative initiatives, and its implications for VASPs, regulators, financial institutions, and law enforcement bodies. Particular attention was paid to harmonising Ukrainian legislation with European regulations—especially the MiCA Regulation—and FATF standards, as well as the distribution of responsibilities among regulators.

Understanding risks helps to prevent the use of virtual assets for money laundering, terrorist financing, and other unlawful activities. In Ukraine, virtual asset-related risks fall into two categories: general risks, common across many countries, and specific risks, unique to the Ukrainian context.

1. General risks include issues linked to the adoption, transfer, and storage of virtual assets—such as the opacity of fund origins, difficulty in tracing transactions, and the risk of losing control over assets.
2. Specific risks relate to the use of OTC services that enable circumvention of capital control restrictions, facilitate sanction evasion, and contribute to financing Russia’s military efforts. Ukraine also serves as a transit hub for cryptocurrency flows used in political operations and hybrid warfare. “Drop” schemes (money mule scams) also pose a serious threat, causing significant losses to the state budget. Addressing these challenges requires stronger state oversight and enhanced collaboration with the private sector.

A separate session was dedicated to international experience. Experts from Lithuania, France, and the UK shared their regulatory approaches, the development of blockchain analytics within banks, and stressed the importance of balancing under- and over-regulation, maintaining open dialogue with the industry, and fostering intergovernmental cooperation.

Participants developed a set of recommendations aimed at improving virtual asset policy and financial crime prevention, covering four key areas:

• Regulation: Prioritise certain types of assets initially, integrate cybersecurity into virtual asset policy, and ensure clear compliance rules.
• Supervision and enforcement: Make better use of available analytical tools, extend oversight to unlicensed crypto platforms, and build institutional capacity.
• Knowledge and capacity building: Verify data quality, promote cross-sector knowledge exchange, and develop effective risk-based approaches.
• Effective collaboration and cooperation: Strengthen public-private engagement by clearly identifying key stakeholders, closing gaps in information sharing, and creating joint risk management mechanisms.

As the virtual asset sector evolves rapidly, effective and balanced regulation becomes increasingly urgent. Public-private partnership is a vital tool for implementing new approaches in this field—through collective action, knowledge exchange, and building trust among public institutions, businesses, and the expert community.