Ukraine’s State Financial Monitoring Service uncovers terrorism financing scheme through crypto exchange

Ukraine’s State Financial Monitoring Service has identified a cross-border network for financing terrorism, money laundering, and circumventing sanctions against Russia — the scheme operated through a Ukrainian citizen’s account on a cryptocurrency exchange, through which more than approximately €11.1 million passed.

This was announced on Tuesday by the head of the State Financial Monitoring Service, Filipp Pronin.

“More than $13 million passed through one Ukrainian’s account on a crypto exchange, and $3.5 million of that involved transactions with sanctioned Russian services and wallets belonging to an international terrorist organization,” Pronin stated.

According to him, the subject of the investigation resides in one of the European Union countries. Money arrived in his account from external crypto addresses and was almost immediately transferred further — without any trading or investment activity taking place. The volumes, the nature of the fund flows, and the dozens of addresses involved indicate, in the agency’s assessment, illegal virtual asset exchange activity conducted without the appropriate license.

However, Pronin emphasized that the key issue is not the absence of a license, but the route the money took.

“The funds came in from exchanges and exchangers without client verification, among which were sanctioned platforms linked to Russia or involved in sanctions circumvention. They went out to non-custodial wallets with ties to Russian exchanges. A portion of the transfers went to the Islamic Revolutionary Guard Corps — Iran’s military formation recognized as a terrorist organization,” the agency’s head said.

To conceal his activities, the subject used a VPN, conducted internal transfers predominantly with citizens of Ukraine and Russia, accessed other accounts from devices linked to his own account, and was connected to more than 35 foreign companies across various jurisdictions.

Pronin characterized the totality of the identified factors as indicators of a cross-border network for financing terrorism, money laundering, and circumventing sanctions against Russia. The case materials have already been handed over to law enforcement agencies.