Crypto Crimes amid Special Military Operation and Western Sanctions

Abstract

In unstable situations and in the face of poorly functioning governments, such as in Ukraine, the systemic risk of anti-money laundering remains, and digital currencies become especially attractive in these chaotic environments. After the start of Russia’s special military operation in Ukraine and against the backdrop ofincreased Western sanctions pressure, crypto activity has rapidly increased, as it aims at withdrawing funds from the world’s leading crypto exchanges and platforms, as well as the outflow of capital from the Russian Federation. In turn, the active cryptocurrency legalization of undeclared income in Russia led to serious jumps in the rate of cryptocurrencies: from their initial growth to a sharp decline. Following the results of the above studies, the author proposes a mechanism for combating illegal circulation of cryptocurrency before the adoption of legislative regulation. The author substantiates the conclusion that the task of ensuring financial security and stability of the national currency, as well as combating the legalization of criminal proceeds and the outflow of capital from the country should be solved by introducing criminal law rules on liability for illegal circulation of cryptocurrency.