Financial monitoring of virtual assets: international standards and challenges of implementation in Ukraine

Анотація

The article examines financial monitoring in the field of virtual asset circulation, including cryptocurrencies, tokenized assets, and decentralized financial platforms. The rapid expansion of the virtual asset market creates new economic opportunities while simultaneously generating heightened risks related to money laundering, terrorist financing, and sanctions evasion, which necessitates effective regulatory and supervisory responses. Problem statement. The core problem lies in the insufficient alignment of national financial monitoring mechanisms for virtual assets with international FATF standards and European regulatory approaches, as well as the fragmented enforcement practices in Ukraine amid the rapid evolution of the crypto market. Unresolved aspects. Despite ongoing regulatory efforts, significant gaps remain in the effective implementation of FATF Recommendation 15, the operationalization of the Travel Rule, coordination among national supervisory authorities, and oversight of decentralized finance services and cross-border virtual asset transactions. Purpose of the article. The purpose of the study is to conduct a comprehensive analysis of international financial monitoring standards applicable to virtual assets, assess current money laundering and terrorist financing risks, and substantiate directions for improving Ukraine’s regulatory framework in line with FATF requirements and EU practices. Main content. The article analyzes the legal nature of virtual assets, FATF requirements for Virtual Asset Service Providers (VASPs), the application of the Travel Rule, and empirical data on illicit crypto transactions based on Chainalysis reports. Particular attention is paid to the European regulatory model established by the Markets in Crypto-Assets Regulation (MiCA), as well as to the comparative analysis of the concepts of VASP and Crypto-Asset Service Provider (CASP). The current state of legal regulation and financial monitoring of virtual assets in Ukraine is also assessed. Conclusions. The study demonstrates that effective financial monitoring of virtual assets can be achieved only through a comprehensive approach combining FATF international standards, harmonization with EU law, advanced analytical technologies, and strengthened institutional capacity of national regulators. The practical value of the research lies in developing recommendations aimed at enhancing Ukraine’s financial security and reducing money laundering and terrorist financing risks in the virtual asset market.

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