Highlights
- An analysis of web traffic from 64 global centralized exchanges (including 6 Ukrainian) showed that ~2.5% of global users are from Ukraine.
- ~$1.12 billion is the CEX’s profit from the Ukrainian audience of 21 CEXs (15 global and 6 Ukrainian exchanges) in 2021–2024.
- ~$202 million is the potential tax revenue from these 21 CEXs.
- $31.6 million is the minimum tax generated by Ukrainian customers from only one CEX. The maximum is $157.9 million.
At the Ministry of Digital Transformation of Ukraine’s initiative, Global Ledger has assessed the potential of the taxation of the Ukrainian crypto market.
Ukraine has been actively working to legalize and regulate cryptocurrency. In March 2022, President Volodymyr Zelenskyy signed the “On Virtual Assets” law, establishing a legal framework for virtual assets. The National Bank announced plans to align with the EU’s Markets in Crypto-Assets Regulation (MiCA) to protect consumers and integrate with EU standards. However, the legislation is set to become effective upon the adoption of corresponding amendments to the Tax Code of Ukraine.
The full report is available below.
21 CEXs: Potential crypto tax could be $202 million in 2021–2024
An analysis of web traffic from 64 global exchanges (including six Ukrainian) showed that an average portion of Ukrainian users equals to ~2.5% of the total user web traffic across all regions.
For further research, we focused on 21 CEXs: 15 global and six Ukrainian exchanges. To calculate the potential tax coverage, the research team:
- Collected the total volume based on the inflows and outflows of the most popular coins and tokens: BTC, ETH, USDT, and USDC (USDT and USDC both on Ethereum and TRON).
- Calculated the estimated global profit generated by exchanges in 2021–2024 and from Ukrainian users based on web traffic data and an estimated profitability rate for CEXs.
- Applied an 18% tax rate to CEX profits.
These CEXs’ calculated and projected profit from the Ukrainian audience in 2021–2024 is ~$1.12 billion.
The potential tax generated from the Ukrainian audience could amount to $202 million:
- $57 million in 2021
- $43 million in 2022
- $40 million in 2023
- $62 million in 2024.
Customers: Potential crypto tax could amount to $157.9 million in 2024
To predict potential profits and taxes of Ukrainian users of one of the most popular global exchanges, the GL team:
- Calculated the volume of withdrawals initiated by Ukrainian customers from this CEX in Jan–Nov 2024 and predicted it in Nov–Dec 2024 based on calculations.
- Predicted the profit earned by Ukrainian users by applying different profit percentages (e.g., 10%, 30%, 50%), as the exact profitability is unknown.
- Applied a 5% tax rate to predicted profits.
Based on these calculations and predictions, the potential profit could be $0.63 billion, $1.89 billion, and $3.16 billion, while potential tax could amount to $31.6 million, $94.7 million, and $157.9 million respectively.
Mining: $113.15 million in revenue in 2021–2024
We’ve analysed 13 major mining pools, including Foundry USA, AntPool, F2Pool, and ViaBTC. Based on web traffic, we estimate that Ukraine contributes approximately ~0.94% to global mining, generating $113.15 million in revenue from 2021 to 2024.
Non-custodial wallet apps: 1.71 million downloads
In 2021, users in Ukraine downloaded 682,224 crypto wallets. By May 2024, the number reached 1.71 million. This could signify crypto adoption, leading to increased crypto activity, which could potentially be taxable events.
To conclude
An analysis of the available data revealed substantial potential tax revenue that the state budget could have received if the country had clear regulations for the crypto market. The calculated potential crypto tax amounts are not static. Given the overall trend of rising cryptocurrency prices and increasing usage among the Ukrainian audience, potential tax revenue is also expected to grow.
The research focuses primarily on centralized exchanges (CEXs), as they handle the most global cryptocurrency volume (according to CoinMarketCap) and are licensed as legal crypto providers in many regions. It also contains data about mining pools, which handle a significant part of the global mining pools market and play a key role in securing and validating transactions globally, and non-custodial wallets downloads.
A Ukrainian-language version of the report is available below.