The recent shake-up at the State Financial Monitoring Service of Ukraine (SFMS), responsible for combating money laundering and terrorist financing, has drawn mixed reactions. Some see it as a step toward fighting corruption and financial crime, while others view the changes with caution, uncertain about the motivations behind the overhaul.
But personnel changes, however symbolic, aren’t the answer to systemic problems. Ukraine’s financial system faces deeper challenges: an underutilized public-private partnership model, a gaping regulatory void in the virtual asset space, and a lack of clarity and capacity in financial investigations. Tackling these issues demands urgent, structural reforms — not just new faces at the top.
The situation is critical, with far-reaching consequences for Ukraine's future. As billions in international aid flow in and Ukraine pushes closer to European Union accession, the country’s financial integrity has become a litmus test for both international trust and domestic accountability. This is Ukraine’s moment to demonstrate its strength — not only as a recipient of global support but as a reliable partner in the fight against financial crime.
"As billions in international aid flow in and Ukraine pushes closer to European Union accession, the country’s financial integrity has become a litmus test for both international trust and domestic accountability."
Globally, public-private partnerships (PPPs) have emerged as one of the most effective tools in fighting financial crime. PPPs involve collaboration between public institutions and private companies (in this case, financial institutions) to enhance information sharing, risk assessment, and coordinated action. The benefits of such cooperation are clear — from Australia’s rapid takedown of a multimillion-dollar laundering syndicate to Singapore’s real-time financial crime collaboration platform.
Ukraine, however, has yet to fully tap into this potential. The Center for Finance and Security (CFS) at RUSI, in collaboration with Ukraine-based Center for Financial Integrity (CFI), evaluated the current status of these initiatives in its first task force report, “PPPs and Fighting Financial Crime in Ukraine.”
Private financial institutions, from banks to payment processors, possess the data, technology, and on-the-ground insight that could transform Ukraine’s anti-money laundering efforts. Yet trust deficits and weak information-sharing mechanisms have stymied meaningful cooperation. To bridge this divide, Ukraine must go beyond ad hoc councils and discussions.
Establishing a secure, real-time platform for collaboration — focused on high-risk areas like monitoring cryptocurrency transactions or tracking suspicious cross-border payments — would be a powerful first step. As trust builds, targeted pilot programs can pave the way for broader systemic change. A new era calls for deeper collaboration with businesses, the IT industry, and fintech companies to revolutionize the fight against financial crime.
Cryptocurrency was a lifeline for Ukraine during the first days of the war, enabling rapid international donations when traditional systems were too slow or rigid. Yet this success story comes with risks. Without clear regulations, virtual assets have also become a conduit for illicit financial flows. Despite two competing draft laws sitting in parliament since 2023, the sector remains largely unregulated, leaving Ukraine vulnerable.
The solution is straightforward but requires political will. Ukraine must pass legislation designating a regulator, such as the National Securities and Stock Market Commission, to oversee virtual asset service providers (VASPs). A registry of these providers — backed by compliance incentives and penalties — should be implemented. Beyond legislation, Ukraine must conduct risk assessments of virtual asset flows, particularly in cross-border transactions. Regulatory sandboxes, where new technologies can be tested under supervision, could also foster innovation while maintaining oversight.
"The solution is straightforward but requires political will."
The lack of clear regulatory oversight over virtual assets opens the door for Russia to weaponize cryptocurrency, using it to evade sanctions and mine bitcoins in gray zones. Addressing this issue is no longer solely about the financial system — it’s an integral part of national security.
Financial investigations are the backbone of any effective anti-money laundering regime. Yet in Ukraine, they remain disjointed and inconsistent. Agencies lack not only the tools but also the clear roles and responsibilities necessary to act decisively. As a result, critical investigations stall or fail to deliver meaningful outcomes. To address this, Ukraine needs a foundational overhaul of its approach to financial investigations.
First, the government should establish clear guidelines outlining the roles of each agency involved. Second, it should invest in capacity-building, providing investigators with advanced analytical tools and targeted training. A focus on parallel financial investigations — where financial aspects of crimes are pursued alongside criminal probes — would also strengthen outcomes. Finally, closer collaboration with international law enforcement could offer both technical expertise and moral support during this transformative period.
Ukraine’s wartime circumstances have understandably led to restrictions on access to public financial data, but these measures must remain temporary. Civil society and oversight bodies, both domestic and international, need access to this information to ensure accountability. Without transparency, Ukraine risks undermining its credibility at a time when trust is its most valuable currency.
Many state registries have resumed operations, though access to certain data remains restricted to safeguard sensitive information. By balancing security with transparency, Ukraine could signal a commitment to accountability and allow citizens and allies alike to see its progress firsthand.
Equally important, Ukraine must ensure that financial investigations lead to real-world consequences: convictions, asset recoveries, and a deterrent effect that criminals can’t ignore. The number of convictions in money laundering cases remains disappointingly low, as does the success rate of asset recovery — something the global financial crime watchdog, the Financial Action Task Force, is likely to view negatively in any upcoming evaluation.
Leadership changes at the SFMS are not unimportant, but they are no substitute for meaningful reform. If Ukraine wants to be seen as a reliable partner — not just a recipient of aid — it must take bold, decisive action. Though the steps to address these challenges are clear, their execution demands political will and coordination. Ukraine must harness the power of public-private collaboration, close regulatory gaps in virtual assets, and build capacity for financial investigations.
This moment presents a rare chance for meaningful change. With the world’s eyes on its struggle for sovereignty and stability, real reform would send an unmistakable message: Ukraine is not just surviving but leading by example — leaping forward with significant societal reforms, including in the fight against financial crime.
Editor’s Note: The opinions expressed in the op-ed section are those of the authors and do not necessarily reflect the views of the Kyiv Independent.
Arvydas Anušauskas
