An escalating corruption scandal at Ukraine's state nuclear operator Energoatom and the ongoing prosecution of former Ukrenergo chief Volodymyr Kudrytskyi are converging into a crisis that threatens Ukraine's ability to weather Russian attacks on its grid.

With Kyiv residents now enduring blackouts lasting 12 to 16 hours, the political turmoil has exposed gaping holes in protection for key energy sites—failures that current and former officials attribute to corruption and political interference, rather than Russian firepower alone.

The political crisis triggered a cascade: Western donors withdrew, protective construction stalled at critical energy facilities, and Ukraine's most vulnerable infrastructure faced Russian strikes without proper defenses.

Why this matters

The combined effect of corruption and political persecution deepened Ukraine's energy crisis by shutting down the main channel of Western financial support. International aid through Ukrenergo dropped to just 5-10% of previous levels after Kudrytskyi's September 2024 dismissal—from €1.5 billion over 18 months to a trickle.

Meanwhile, zero protective shelters were built for transformers at Energoatom, thermal power plants, and regional energy companies until autumn 2024, despite Ukrenergo completing approximately 60 such structures at its own facilities by September.

Oleksandr Kharchenko, director of the Energy Industry Research Center, told Suspilne that this loss of international backing is directly responsible for the severity of current blackouts—a consequence of institutional breakdown rather than Russian missiles alone.

When protection worked—and when it didn't

The protection systems built at Ukrenergo, Ukraine's national electricity transmission system operator, and Energoatom, Ukraine’s nuclear operator, tell a tale of two radically different management systems.

Under Kudrytskyi's leadership, Ukrenergo partnered with the government's Agency for Restoration and Development of Infrastructure to construct approximately 60 anti-drone shelters for critical transformers by September 2024. These massive concrete structures—up to 25 meters tall—were designed specifically to withstand mass Iranian Shahed drone strikes.

The effectiveness proved remarkable. According to the Verkhovna Rada's temporary investigative commission cited by Kharchenko, out of 74 protected objects built by Ukrenergo and the Agency, only one autotransformer was destroyed by a direct hit from a heavy missile. The rest survived repeated attacks.

Kudrytskyi explained to Espreso that Ukrenergo secured several billion euros in aid—significantly more than Ukraine's entire Energy Ministry obtained. Western partners trusted the company's management and saw results. Between 2020 and 2024, Ukrenergo attracted $1.5 billion in grants and loans, becoming the second-largest recipient of international aid in Ukraine after the state itself.

But outside Ukrenergo's network, the picture was bleak. At the time of Kudrytskyi's dismissal in September 2024, zero protective shelters had been built for transformers at non-Ukrenergo sites—including Energoatom facilities, thermal power plants, and regional energy companies, according to Kudrytskyi in his interview with the BBC.

Kharchenko confirmed that Energoatom didn't even begin tendering for protective construction until late summer or early autumn 2024. The unprotected Energoatom substations and open switchgears became priority targets, he explained, and current blackouts stem directly from this failure to protect key generation facilities.

The delayed protection had a simple reason, Kharchenko suggested: some officials questioned whether such expensive fortifications were necessary at all.

The $100 million corruption scheme

On 10 November 2025, Ukraine's National Anti-Corruption Bureau unveiled Operation Midas—a 15-month investigation documenting systematic corruption at Energoatom. Over 1,000 hours of surveillance recordings captured contractors openly discussing "Shlagbaum" (bar gate)—slang for the 10-15% kickbacks demanded from anyone wanting to work with the nuclear operator.

The scheme operated from a Kyiv office tied to Andrii Derkach, a former Ukrainian MP whom the US Treasury sanctioned in 2020 as "an active Russian agent" for election interference, and who now serves as a Russian senator.

Investigators identified businessman Tymur Mindich—President Volodymyr Zelenskyy's former comedy studio partner—as "Carlson," coordinating the money-laundering network.

Justice Minister Herman Halushchenko, who previously served as Energy Minister, appeared in recordings under the codename "Professor."

Mindich crossed Ukraine's border at 02:09 on 10 November—hours before NABU detectives arrived at his residence, raising immediate questions about information leaks. He's now believed to be hiding in Israel or Austria.

When asked about the $100 million NABU alleges was stolen through the Energoatom kickback scheme, Kharchenko was skeptical: "100 million—this is, well, maybe, 10%." The implication: the full corruption scale could reach $1 billion.

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Political prosecution and collapsing Western trust

Between 2020 and 2024, Ukrenergo chief Kudrytskyi secured $1.5 billion for Ukrenergo from Western partners—triple what Ukraine’s entire Energy Ministry obtained. He ensured shelters were built from donor funds: "We didn't spend a single budget kopeck on those shelters that Ukrenergo built," he told Espreso.

He was dismissed in September 2024—and the money flow stopped. Western partners noticed: Two Western board members—Daniel Dobbeni and Peder Andreasen—quit Ukrenergo, calling the firing "politically motivated."

The dismissal triggered a financial crisis. While talking to Suspilne, Kharchenko explained that Ukrenergo failed to restructure its Eurobonds in coordination with Ukraine's sovereign debt restructuring, pushing the company into technical default. International lenders won't provide new credits to an entity in default, and grant-makers grew cautious.

This funding flow, built around trust for Kudrytskyi, collapsed. "When Kudrytskyi was dismissed, the main channel of Western support through Ukrenergo was effectively closed," Kharchenko explained. "We lost international support for Ukrainian energy. We've lost at least 80% of what we could have received."

The aid flow plummeted from €1.5 billion over 18 months to just 5-10% of previous capacity. Naftogaz now maintains Western trust with quality corporate governance, but can only support gas infrastructure—not the devastated electricity sector.

Kudrytskyi now faces fraud charges stemming from a 2018 fence reconstruction project. The case centers on bank guarantees that Ukrenergo properly collected when a contractor failed to complete work—a standard commercial transaction where the state suffered no losses.

The charges materialized 14 months after his dismissal, following his public criticism of infrastructure protection failures by Energy Minister Herman Halushchenko—who was exposed in the Mindich tapes under the code name "Professor" within the criminal organization, according to information from the NABU investigation and reports from lawmakers.

For international donors—whether financial institutions or government aid agencies—trust and reputation of recipients matter fundamentally.

"When these donors see corruption scandals, or political interference in corporate governance, or political cases not backed by facts and made in half a day, this creates additional obstacles," Kudrytskyi told Espreso. "We don't have time to heroically overcome obstacles we create for ourselves."

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Information monopoly and presidential isolation

Kudrytskyi has been accused of failing to ensure energy security, despite having left his position 14 months earlier. The disconnect puzzled observers.

Kharchenko offered an explanation. He sees that people in Zelenskyy's circle are exclusively friendly to Halushchenko—the former Energy Minister now serving as Justice Minister. "Herman Valeriyovych knows how to communicate with people—I assure you, in person he's very pleasant, charismatic, professional, and convincing," Kharchenko said. Most people surrounding the president evidently receive information through one channel.

"I don't see the president, in the energy sphere, inviting people who broadcast any alternative thoughts and assessments, and listening to what's wrong," Kharchenko told Novyi Vidlik.

The monopolized information flow means alternative assessments of infrastructure failures and protection gaps never reach decision-makers. "When you have energy being attacked and negative things happening, and people around you point fingers at each other or say everything's fine, but it's evidently not fine—a manager in such a situation would invite an alternative viewpoint," Kharchenko said. "I don't observe this situation."

Ukraine energy crisis winter forecast: Attack, collapse, recover, repeat

Kharchenko predicted a predictable winter pattern: major Russian attack, followed by three to four days of severe disruption with 12-16-hour blackouts, then a gradual recovery until the next strike.

Three cities face the worst schedules: Kyiv, Odesa, and Kharkiv—massive consumption centers with insufficient internal generation. Kyiv and Odesa each face roughly one gigawatt power deficits. These cities will consistently endure the longest outages.

"I'm not an adherent of winter armageddon," Kudrytskyi told Espreso. "I don't think the energy system will collapse or there will be catastrophic consequences. We'll still survive the next winter. But of course, the question is the duration of outages and the degree of damage Russians can achieve to our facilities."

The strategic solution, both Kudrytskyi and Kharchenko emphasized, is accelerating distributed generation: replacing 15-20 large Soviet-era power plants vulnerable to missile strikes with hundreds of small gas, solar, and battery storage facilities scattered across Ukraine. Such a network would be exponentially harder for Russia to destroy and provide crucial regional resilience.

But distributed generation requires coordination, funding, and institutional trust—precisely what corruption and political persecution have destroyed.

The institutional breakdown

The failure wasn't technical or financial. In summer 2023, authorities identified several hundred critical infrastructure objects requiring protection—not just Ukrenergo substations, but power plants, gas infrastructure, and other essential facilities.

From summer 2023, Ukrenergo and the restoration agency built protection for Ukrenergo substations. But what happened at other facilities?

In his Espreso interview, Kudrytskyi posed the critical questions:

• Why didn't the Energy Ministry coordinate protection for all other objects at the same time Ukrenergo was building shelters?
• Why didn't it determine budget sources for such protection?
• And if there were no budget funds, why didn't it approach donors who were ready to help Ukrainian energy?

The answer emerged in November 2025 surveillance recordings: some officials were too busy organizing kickback schemes to focus on infrastructure protection.

Anti-corruption lawyer Daria Kaleniuk wrote that persecution of government critics through fabricated criminal cases had become a trend. Western board members Daniel Dobbeni and Peder Andreasen quit Ukrenergo in September 2024, calling Kudrytskyi's dismissal "politically motivated."

Now Ukrainians endure 12-16 hour blackouts at the heart of this energy crisis—not because Russia attacks, though it does, but because institutions failed to build protection systems, maintain donor trust, or prioritize infrastructure over personal enrichment.

"Any effective action against corruption is very much needed," Zelenskyy said after the NABU raids. But the damage was done. The coordination failure between protection, prosecution, and politics left Ukraine's grid more vulnerable than Russian missiles alone could have achieved.

Maxim Volovich

Trained in international relations, Maxim Volovich spent two decades as a diplomat and now covers regional and foreign policy issues as a journalist at Euromaidan Press.

The possibility of using €140 billion of frozen Russian assets for a reparations loan to Ukraine is a unique opportunity for the state. Especially since the US has ceased military aid following Donald Trump's election. However, legal challenges in using these assets are compounded by concerns over how the money might be utilized amid the backdrop of a new corruption scandal, La Repubblica reports.

On 10 November, EU-backed anti-corruption agencies uncovered a large scheme, "Midas", involving four Ukrainian ministries and the country's top energy company. The case is especially painful to the ordinary Ukrainians, who continue to endure up to 12-hour blackouts following Russian missile attacks.

According to investigators, the perpetrators demanded kickbacks amounting to 10–15% of Energoatom contract values. Contractors had to pay to avoid blocked payments or the loss of supplier status. Timyr Mindich, one of President Volodymyr Zelenskyy's closest associates, oversaw the operation of a so-called “laundromat”, where funds were stolen.

The embezzlement of state funds in the energy sector, exceeding $100 million, has raised significant concerns in Europe.

The "Midas" corruption case under Europe's scrutiny

During the Eurogroup meeting on 12 November, where instruments for financing Ukrainian resistance over the next two years were again discussed, several finance ministers repeatedly referred to this corruption case.

Moreover, the scandal in Ukraine erupted after the release of the latest European Commission report on the EU candidate countries, presented last week. It provides a clear assessment that Ukraine has made limited progress in the fight against corruption.

The report also mentions the temporary suspension in July of the independence of the anti-corruption agencies, which are currently handling the case involving the embezzlement of $100 million in state funds. These institutions, according to the report, report growing pressure from state authorities.

Members of Ukraine’s EU-backed anti-corruption agency and the FBI are coordinating actions in the 2025 top energy investigation, which involves the alleged laundering of $100 million, ZN.UA reports, citing its own sources. 

Recently, representatives from both agencies met in connection with the case of Energoatom, Ukraine's sole nuclear operator.

According to investigators, the perpetrators demanded kickbacks amounting to 10–15% of Energoatom contract values. Contractors had to pay to avoid blocked payments or the loss of supplier status. Timyr Mindich, one of President Volodymyr Zelenskyy's closest associates, oversaw the operation of a so-called “laundromat”, where funds obtained through illegal means were laundered.

In the embezzlement case, five individuals have been detained, and seven alleged members of the criminal organization have already been formally charged. Among those searched were Justice Minister Herman Halushchenko, who has since resigned, and Mindich, who is hiding abroad.

FBI returns to Ukrainian investigations 

A new FBI officer has recently arrived in Kyiv, and one of his first meetings was specifically focused on the Mindich case. The FBI representative works within the National Anti-Corruption Bureau of Ukraine under an interagency memorandum originally signed during the bureau’s founding.

The case highlights Ukraine’s commitment, with strong European Union support, to eradicating corruption at the highest levels of government. However, the investigation must yield results and lead to the arrest of jail officials involved in the scheme. The case is especially painful to ordinary Ukrainians, who continue to endure up to 12-hour blackouts following Russian missile attacks.

For comparison, the stolen $100 million could have purchased 27 Patriot missiles or 40,000 Sting interceptor drones. 

After a brief technical pause that coincided with the US President Donald Trump administration, the document was re-signed following NABU Director Semen Kryvonos’s visit to the US. Since then, constant operational cooperation between NABU and the FBI has been restored for cases involving high-level corruption.

Germany maintains its confidence in Ukraine following a major corruption scandal in the country's energy sector, according to German government spokesman Stefan Kornelius in comments to DW

"The federal government will now very closely monitor developments," Kornelius said on 12 November. "We are in the closest confidential contact with the President [of Ukraine Volodymyr Zelenskyy and continue to be at his side, especially in such situations. Now we will observe the development in this particular case. And, if necessary, we may have to take measures in this matter as well."

The spokesman was responding to questions about whether the scandal would lead Germany to tighten control over how Ukraine uses aid.

"At this moment we have confidence in the government of Ukraine that it will take care of resolving this issue itself, as well as in anti-corruption bodies - that they will solve this case and bring it to a logical conclusion," Kornelius emphasized.

He added that corruption is not on the agenda for German-Ukrainian intergovernmental consultations scheduled later this year, and its discussion is not planned.

Finland previously reported that the corruption scandal in Ukraine's government would not negatively impact the European Union's plans to provide financial assistance to Kyiv.

The National Anti-Corruption Bureau of Ukraine (NABU) announced on 10 November an investigation into a large-scale corruption scheme at the National Nuclear Energy Generating Company "Energoatom," codenamed "Midas." Businessman Tymur Mindich, co-owner of Kvartal-95 and former partner of President Zelenskyy, was identified as the scheme's organizer. The prosecution stated that Mindich exerted influence on former Energy Minister Herman Halushchenko and former Defense Minister Rustem Umerov.

On the morning of 12 November, Prime Minister Yulia Svyrydenko announced that Halushchenko, now serving as Justice Minister, had been suspended following the NABU investigation.

Suspects in the case include a businessman described as the head of a criminal organization, a former advisor to Energy Minister Herman Halushchenko, the executive director for physical protection and security at Energoatom, and four individuals involved in the back office for money laundering. Former Deputy Prime Minister and ex-Minister of National Unity Oleksiy Chernyshov also received suspicion.

Two government members will be dismissed in the near future - Energy Minister Svitlana Hrynchuk and Justice Minister Herman Halushchenko.

Foreign Minister Andriy Sybiha discussed the corruption scandal with international partners during a meeting in Canada with counterparts from France (Jean-Noël Barrot), Germany (Johann Wadephul), Italy (Antonio Tajani), and the EU (Kaja Kallas).

"I informed our partners about the situation on the battlefield, efforts to achieve peace and the fight against corruption. I confirmed that those involved in corruption schemes will be held accountable - this is the firm position of President Volodymyr Zelenskyy and our government," Sybiha wrote on X following the talks.

Ukraine is fighting enemies both abroad and within the system. Foreign Minister Andrii Sybiha, during meetings in Canada with his counterparts from France, Germany, and Italy, assured that all those involved in corruption schemes in Ukraine will be held accountable.

An investigation into the alleged embezzlement of $100 million from Energoatom, Ukraine's only company that operates all of the nuclear power plants, is underway. It has been revealed EU-backed anti-corruption agencies have uncovered a large-scale bribery and $100 million scheme involving four ministries. The case is especially painful to ordinary Ukrainians, who continue to endure up to 12-hour blackouts following Russian missile attacks.

The minister is visiting Canada to take part in the G7 foreign ministers’ meeting at the invitation of Canadian Foreign Minister Anita Anand.

The talks are expected to be dominated by Russia's escalating war in Ukraine, stalled US-led peace initiatives, and growing trade frictions within the alliance.

Ukraine is working on building the trust of its international allies 

“Those involved in corruption schemes will be brought to justice,” he emphasized.

In a high-profile corruption case involving Energoatom, Ukraine’s National Anti-Corruption Bureau and Specialized Anti-Corruption Prosecutor’s Office have detained five individuals. In total, seven members of the criminal organization have been formally charged.

The special operation to document the group’s activities lasted over 15 months, beginning in the summer of 2024. During this period, investigators collected a substantial amount of data, including thousands of hours of audio recordings.

Reports indicate that the head of the scheme is businessman Timur Mindich, who is also a co-owner of the entertainment studio Kvartal 95 and an associate of the president.

Mindich reportedly fled abroad a day before the raids, in which millions of dollars in cash were seized. This has raised suspicions that he may have been forewarned about the operation.

“I reaffirmed that those responsible for corruption will be held accountable. This is the firm position of President Zelenskyy and our government,” Sybiha claimed.

On social media, Sybiha called the meeting with French Foreign Minister Jean-Noël Barrot, German Foreign Minister Johann Wadephul, Italian Foreign Minister Antonio Tajani, and the EU's High Representative for Foreign Affairs, Kaja Kallas, "productive."

Sybiha: winter defenses needed, Russian assets must be seized

He also noted that discussions covered the 20th EU sanctions package and efforts to use frozen Russian assets.

“We also focused on strengthening our air defense and energy resilience ahead of winter, including through the PURL and SAFE mechanisms,” the foreign minister added.

Sybiha thanked allies preparing new military and energy aid packages and invited his colleagues to visit Ukraine.

Rubio arrives in Niagara: talks on Ukraine and Gaza continue

US Secretary of State Marco Rubio has also arrived in the Niagara region of Canada to participate in the G7 foreign ministers meeting. He is expected to address questions from G7 partners regarding President Donald Trump’s initiatives to end the war in Ukraine, as well as the second phase of the Gaza ceasefire agreement.

The meeting comes shortly after efforts to organize a summit between Russian President Vladimir Putin and US President Donald Trump were suspended last month, Reuters reports. Officials cited that Moscow’s refusal to cease hostilities in Ukraine overshadowed the planned negotiations.

Ukraine's National Anti-Corruption Bureau (NABU) released audio evidence from Operation Midas capturing suspects plotting 10–15% kickbacks on Ukraine's nuclear operator protection contracts.

Businessman Tymur Mindich, allegedly one of the key suspects, remains fugitive as parliament prepares dismissal votes for high-ranking officials and the opposition European Solidarity party, led by former president Petro Poroshenko, pushes to disband the entire Cabinet of Ministers.

The 15-month investigation exposed a $100 million kickback scheme on contracts for nuclear facility protection—infrastructure Russia has systematically targeted throughout the war. With parliament now considering dismissal of top energy officials and Ukraine seeking Western funds for energy infrastructure, the case demonstrates whether anti-corruption institutions can deliver the accountability Western partners require.

NABU tapes reveal protection racket at nuclear operator

NABU published recordings capturing suspects discussing systematic extortion from Energoatom contractors. The suspects used codenames throughout the 15-month investigation.

According to MP Yaroslav Zhelezniak, the recordings feature individuals identified by the following nicknames, Novynarnia reported:

• "Carlson" – Tymur Mindich, businessman and co-owner of Kvartal 95 studio, associate of President Volodymyr Zelenskyy
• "Professor" – Herman Halushchenko, Justice Minister and former Energy Minister
• "Tenor" – Dmytro Basov, executive director for physical protection and security at Energoatom
• "Rocket" – Ihor Myroniuk, former advisor to Halushchenko during his tenure as Energy Minister

While NABU has not officially confirmed all identities, Hromadske reported that law enforcement confirmed Myroniuk as a former energy minister advisor and Basov as Energoatom's executive director for physical protection.

The recordings reveal how contractors faced what investigators call the "Shlagbaum" (boom barrier) system: pay the percentage or watch payments freeze and supplier status vanish. One company allegedly received a 435 million UAH ($10.5 million) contract in 2025 after agreeing to the higher 15% rate, NV confirmed.

The tapes also capture suspects' awareness of investigative risks. In a June 2025 exchange, "Carlson" expressed concern: "I don't want to end up being served with suspicion," Ukrainska Pravda noted. A month later, "Tenor" discussed building protective structures with "Rocket," mentioning colossal figures and asking whether to continue. "Rocket" replied: "I'd wait. But, f***, honestly, it's a shame to waste the money," Hromadske transcribed.

Money laundering through Derkach family office

NABU investigators uncovered a dedicated money-laundering office in central Kyiv belonging to the family of Andriy Derkach, a former Ukrainian MP now serving as a Russian senator, that processed approximately $100 million.

The scheme operated like a bank—with its own "cash discipline," accounting, currency operations, and geography stretching from Kyiv to Atlanta, Georgia, and Moscow, Ekonomichna Pravda noted. "Through this office, strict accounting of received funds was carried out, a "black ledger" was maintained, and money laundering was organized through a network of non-resident companies," the bureau stated.

In intercepted conversations, "Rocket" and "Tenor" discussed transferring tens of thousands of dollars while inventing new transfer routes. The operational part of the "laundry" was headed by someone nicknamed "Sugarman"—presumably one of the Tsukerman brothers, Mykhailo or Oleksandr, Ekonomichna Pravda noted.

Investigators discovered the scheme used cryptocurrency for money laundering and collected cash at at least 30 different locations across Kyiv to avoid financial monitoring detection, Suspilne reported. A significant part of the transactions, including cash disbursements, took place outside Ukraine.

During searches, NABU officers found an item labeled "Federal Protective Service of the Russian Federation" at the office of one scheme co-organizer, which the bureau called an "interesting artifact," NV highlighted.

Opposition escalates pressure with dismissal motions

Draft resolutions have been registered in the Verkhovna Rada to dismiss Justice Minister Herman Halushchenko and Energy Minister Svitlana Hrynchuk, Ukrinform documented. The documents are listed under registration numbers 14200 and 14201 on the parliament's website. The initiatives were submitted by MP Yaroslav Zhelezniak.

Neither resolution has been added to the parliamentary agenda. Both motions are registered but not scheduled for consideration, and no date has been confirmed for votes on either the ministerial dismissals or a broader Cabinet resignation procedure.

Hrynchuk responded to the dismissal motion during a briefing: "I will not react to this because I do not understand the claims," UNN quoted. She emphasized continuing her duties: "I am doing my job."

Halushchenko has not publicly addressed the searches or dismissal motion. The Justice Ministry did not issue statements responding to the allegations.

European Solidarity party escalated the political response by initiating a procedure to dismiss the entire Cabinet of Ministers. "We are beginning the procedure for the resignation of the government—unprofessional and corrupt. Our goal is state governance, the unity of society, and the trust of partners. We call on all colleagues in parliament who are aware of the threats to the state to sign the resignation of the Cabinet of Ministers for the sake of forming a government of national salvation," the party stated on 10 November, Interfax Ukraine reported.

The party statement emphasized the wartime context: "When millions of Ukrainians were left without electricity during shelling, when the best were dying every day at the front, another 'battery' was working in the rear—the one that charged the pockets of the chosen ones. One hundred million dollars that could have gone to protect the energy infrastructure turned up in Energoatom's schemes," Interfax Ukraine quoted.

Zelenskyy's broad condemnation avoids names

President Zelenskyy addressed the investigation in his evening address on 10 November, hours after the raids. "Any effective action against corruption is very much needed. The inevitability of punishment is essential," he stated, Ukrainska Pravda reported. "Energoatom currently provides Ukraine with the largest share of power generation. Integrity within the company is a priority."

The president neither mentioned Mindich nor addressed the searches at Halushchenko's residence. "The energy sector and every branch, everyone who has constructed corrupt schemes, must face a clear procedural response. There must be convictions," Zelenskyy continued. "And government officials must work together with NABU and law enforcement bodies—and do it in a way that delivers real results."

The statement marks a careful position for Zelenskyy, whose administration faced July protests after attempting to subordinate NABU to the Prosecutor General. Parliament reversed that law after mass demonstrations, restoring the bureau's independence.

Mindich's flight hours before searches

Mindich crossed Ukraine's border at 02:09 on 10 November—hours before NABU detectives arrived at his residence, LIGA.net confirmed citing law enforcement sources. Zhelezniak stated Mindich "will be hiding in Israel and Austria." The timing raised immediate questions about information leaks, prompting SAPO head Oleksandr Klymenko to create a commission investigating the possible data breach, UNN reported.

Separately, the Security Service of Ukraine opened criminal proceedings on 6 November under Article 111-2 (aiding an aggressor state) based on allegations that Mindich maintained business operations in Russia during the full-scale invasion, specifically diamond extraction and sales, Interfax Ukraine detailed. The FBI is investigating Mindich for possible money laundering connected to the Odesa Port Plant, NV noted.

Operational implications for wartime energy security

The alleged corruption occurred while Russia conducted systematic strikes against Ukraine's energy infrastructure. Energoatom, which generates over half of Ukraine's electricity after the occupation of Zaporizhzhia Nuclear Power Plant, manages procurement for nuclear safety and protective construction.

Diverting funds from nuclear safety projects creates vulnerabilities that could compromise defense readiness. The investigation reveals a pattern where contracts meant to protect critical infrastructure instead enriched middlemen operating outside official authority—turning wartime security needs into profit opportunities.

With Ukraine requesting additional Western financial support for energy infrastructure protection, according to the European Commission website, the investigation tests whether Kyiv can demonstrate effective governance over reconstruction investments. The scheme's exposure comes as the EU has already warned that failures in anti-corruption enforcement could jeopardize €50 billion in assistance, Euromaidan Press reported.

Ukraine's National Anti-Corruption Bureau (NABU) revealed on 10 November 2025 an intricate corruption scheme at Energoatom: unvetted operatives wielding control over the country's state nuclear company through systematic bribery. Over 1,000 hours of surveillance recordings and 70 nationwide raids documented how these external actors, without formal positions, made critical decisions affecting the strategic enterprise.

The investigation, dubbed Operation Midas, targeted businessman Timur Mindich, co-owner of President Volodymyr Zelenskyy's former comedy studio Kvartal 95, along with Justice Minister Herman Halushchenko, who previously served as energy minister, and several Energoatom executives, according to Ukrainian outlet NV.

MP Yaroslav Zhelezniak said Mindich left Ukraine hours before NABU officers arrived and "will be hiding in Israel and Austria," Interfax Ukraine reported.

How the scheme operated: kickbacks and shadow control

The evidence is stark: video and audio recordings show Energoatom contractors openly discussing bribe percentages—10 to 15 percent of contract values, investigators found. They call it "Shlagbaum," or boom barrier, slang for an obstacle designed to extract payments.

The scheme was ruthlessly systematic: prosecutors say bribes were demanded in exchange for avoiding blocked payments or loss of supplier status."In fact, management of the strategic enterprise with annual revenue of over $4.7 billion was carried out not by official employees, but by outsiders who had no formal authority, yet took on the role of 'watchers,'" NABU specialists said.

The recordings capture conversations about halting critical infrastructure protection projects—not for engineering reasons, but over monetary disputes about kickback rates.

Who investigators targeted in nationwide raids

The operation zeroed in on a network of officials and businessmen, including:

• Timur Mindich: Businessman and Kvartal 95 co-owner whose interests reportedly span defense (drone manufacturer Fire Point) and energy sectors. Media reports claim the FBI is investigating him for money laundering in cooperation with NABU.
• Herman Halushchenko: Current Justice Minister who served as Energy Minister during the period under investigation. Zheleznyak submitted a formal request for his dismissal.
• Ihor Myroniuk: Former advisor to Halushchenko whom sources describe as an "overseer" who met with contractors in back-office negotiations. NABU conducted searches at his residence.
• Zukerman brothers (Mykhailo and Oleksandr): Financiers who allegedly handled Mindich's business operations. Zhelezniak reported both fled Ukraine, though NABU officers intercepted one brother during a summer escape attempt.

Energy Minister Svitlana Hrynchuk also faces dismissal calls over alleged connections to the scheme.

Political fallout and parallel investigations

The scandal has triggered immediate fallout. Parliament member Zheleznyak branded it "systemic corruption" demanding action, and dismissal requests for Galushchenko and Hrynchuk face Parliamentary vote.

Ukraine's Security Service (SBU) is separately investigating Mindich for "assistance to an aggressor state" based on allegations about diamond extraction and sales operations in Russia during the full-scale invasion, Interfax Ukraine reported. SBU's Main Investigation Department confirmed on 6 November 2025 that it opened criminal proceedings under Article 111-2 of Ukraine's Criminal Code.

Wartime vulnerability: what this means for Ukraine's energy security

The alleged corruption occurred while Ukraine's energy infrastructure faced systematic Russian missile and drone attacks. As a state enterprise managing nuclear power operations with annual revenues exceeding $4.7 billion, Energoatom's procurement and staffing processes offered lucrative opportunities for corrupt actors.

"Corruption in the energy sector, money laundering, illegal enrichment," Oleksandr Abakumov, head of NABU's detective unit, outlined as the main directions of the large-scale investigation, NV reported.

Diverting funds meant for nuclear safety and infrastructure projects creates vulnerabilities that could compromise defense readiness and undermine public trust in government accountability during wartime.

What happens next

NABU has not publicly identified all participants in the alleged criminal organization. Prosecutors say audio and video evidence will support further prosecutions as the investigation expands.

The case is seen as a critical test for Ukraine's anti-corruption infrastructure. Western governments have previously defended NABU's independence, viewing such enforcement as essential to Ukraine's European integration path and its ability to maintain international support.

The investigation also raises serious governance questions for Energoatom. Before the full-scale invasion, the company generated approximately half of Ukraine's electricity. With the six-reactor Zaporizhzhia Nuclear Power Plant under Russian occupation since March 2022, the integrity of the company's remaining operations is paramount.

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Last week I went to Dubai. I didn’t much like it; Dubai feels as if the brief was to build a city but to leave out all the things that make cities good. Then again, I was there for a crypto conference. And my overall impression of that was – if Western sanctions are indeed shutting Russians out of the world economy, someone should tell the Russians.

The free ice cream at the gate was sponsored by a crypto company promising seamless exchanges between roubles and the dollar stablecoin USDT; an exhibitor offered to deliver you cash in an hour when you transferred them some crypto; and the title sponsor was A7A5, fresh from being sanctioned by the European Union, but very much alive, kicking, and cheerfully distributing stickers to people who took a spin on its wheel of fortune.

The centre of the hall was dominated by a crypto-trading competition, in which a number of people sat behind screens and sought to make a profit while against the clock. Despite the best efforts of two fast-talking Russian MCs, as a spectator sport, it had all the charm of watching an HR department finishing up the month’s payroll. Still, the competition drew the biggest crowd simply for the lack of other things going on.

None of the whales that might once have come to a Dubai crypto conference were present, now all the action has spectacularly moved to Washington, DC. Check out this Reuters investigation into how much cash The Trump Organization has made in just the first six months of 2025: “the U.S. president’s family raked in more than $800 million from sales of crypto assets in the first half of 2025 alone”, with “potentially billions more in unrealized ‘on paper’ gains”, mostly from foreign sources.

Those who did make it to Dubai intoned the usual verities about crypto ushering in a new age of liberty, despite the huge contradictions all around them. Particularly bewildering was a panel featuring Vít Jedlička, a Czech libertarian and founder of “start-up nation” Liberland, alongside Nabil Arnous, whose job is to bring investment into “Innovation City”, a newly-renamed AI-powered free trade zone in the absolute monarchy that is Ras Al Khaimah, one of the seven emirates that make up the UAE. The blockchain is powerful indeed if it can unite people from such supposedly opposite political poles.

Even more head-scratching to me though was a presentation by Reeve Collins, who co-founded Tether and was an early advocate of all things crypto, He came to Dubai to pitch his idea for “white label” stablecoins which would allow companies to put their name on a dollar-pegged cryptocurrency while leaving all the hard work of running the blockchain to someone else.

Why might companies want to do that? Because every time they sell something, they get to collect even more data about their clients than they already do, as well as earning profit from issuing money that currently goes to the government. 

“Since this is programmable money, you get real data on all of the users, and you get to understand who are the power-users, who deserves more, who deserves to be rewarded,” Collins said. “This is loyalty points times a thousand. It really will supercharge what companies are able to offer their users, so they'll be able to extract more value.”

I kept expecting someone to speak up and point out how far his vision had strayed from cryptocurrencies as a tool for individual autonomy, rather than a tool that enables the world’s largest corporations to frack humanity even harder than they are now. But no one did. Instead, the conference moved onto a panel about how governments couldn’t be trusted.

At some point the music will stop, and none of us will have chairs, and there will be an almighty blow-up. The prospect slightly terrifies me.

Kyrgyzstan's crypto compulsion

For now, though, the music is very much still playing. Particularly in places like Kyrgyzstan, which seems to be doubling down on its strategy of becoming a ‘cryptatorship’ like El Salvador. Binance founder Changpeng Zhao, the crypto billionaire who pleaded guilty to violating U.S. anti-money laundering laws and was recently pardoned by Trump – though the U.S. president claimed not to know Zhao –  headed to Bishkek to talk up its transformation. “Had a great time in Kyrgyzstan in the past two days. I encourage more crypto companies to explore the country too,” he Xed.

There are already a number of crypto companies in Bishkek, including the sanctioned A7A5, and their close connections with the Kyrgyz government are of great interest to the country’s journalists. However, since Kyrgyzstan’s best investigative outlets – Kloop, Temirov Live and Ayt Ayt Dese -- have just been labelled as extremists, it will be difficult for reporters to bring attention to their findings.

“This is the first time in the history of Kyrgyzstan when media outlets have been labelled extremist,” said Kloop in a statement. “Now it is dangerous to like or share outlets’ material, or to circulate it. That could all be considered support for extremist organisations and the circulation of extremist material.” At least, “watching and reading it is currently safe.”

There used to be something admirable about Kyrgyzstan’s bloody-minded refusal to become a dictatorship like the other republics of Central Asia. Now there is something grotesque about the fact that it is the lure of crypto, a technology supposedly intended to enhance freedoms, that is helping to cement autocracy. The country is holding snap parliamentary elections on November 30. The president’s party, unsurprisingly, is expected to do very well.

Watching Kyrgyzstan heading towards autocracy is a reminder that the only plausible long-term solution to kleptocracy is for rich countries to stop enabling it. If Westerners started living up to their professed values, and made it impossible for crooks to buy property and launder money in the West, it would reduce the appeal of being one. 

A version of this story was published in this week’s Oligarchy newsletter. Sign up here.

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I read a lot of history books and often find myself wondering about how current events will be interpreted by future historians. I appreciate that some people might see this as an overly optimistic practice (“get real, loser, there won’t even be historians in the future, let alone ones able or willing to objectively interpret the past” etc) but I still find it valuable as a way to create a sense of perspective that can otherwise be hard to find.

So, what will historians make of the latest developments in the United States? On Thursday, the government sanctioned Russia’s two most significant oil companies, in what threatens to be a massive blow to the financial underpinning of a key geopolitical adversary. On Friday, however, the government pardoned Changpeng Zhao, a crypto tycoon who two years ago pleaded guilty to, among many other things, facilitating sanctions busting by Iran, also a key geopolitical adversary.

How do you interpret that contradiction, or the fact that the US government is currently not paying its employees, while spending hundreds of millions of dollars, albeit privately raised, on a new ballroom? This could provide material for a hundred newsletters, and no doubt has already done, but I think there is value in asking whether the sole consistent factor here is inconsistency, and whether that itself is significant.

This is what happens when individual people make decisions without oversight, scrutiny or process and, although there may be some value in rapid decision-making, it also makes it far more likely that the decisions reached will be illogical, inconsistent and corrupt. I have been reading a lot recently about the last time inequality was as high as it is now, which was the time before World War One, a time that Americans call the “Gilded Age” and Brits call the Edwardian period. That too was a time of conflicts, inconsistency and excess, when plutocrats built ludicrous houses for themselves, and awarded themselves vast pay deals, when politicians got assassinated and political movements appeared and disappeared with dizzying speed.

I try to be optimistic, because there’s no sense in being otherwise, but the parallel is worrying. After all, the period before World War I all ended with World War I. If I were a plutocrat, I would be working very hard to steer the horse in another direction, away from disaster, rather than spurring it on ever faster.

RESTITUTION FROM RUSSIA?

But look, like a refugee from a different galaxy, here comes news of what should be the end of the long-running legal challenge brought by shareholders in the ex-oil company Yukos against the Kremlin’s expropriation of their assets. The Kremlin lost, and now the shareholders can seek to claim tens of billions of dollars from state assets worldwide. This saga sort of began 22 years ago when the Russian authorities arrested the country’s richest man, Mikhail Khodorkovsky, prosecuted him, and imposed such vast back tax bills that it could auction off his assets in a process that – funnily enough – was won by a state oil company run by a close ally of Vladimir Putin. It was an early sign of the kind of country Putin was building: kleptocratic, authoritarian, centralised, ruthless, and deeply stupid.

But the real beginning of the story was a decade earlier, when President Boris Yeltsin, attempting to build a different kind of Russia, one which followed international norms, signed the Energy Charter Treaty, an agreement designed to protect foreign investors’ stakes in national oil and gas industries.

The primary shareholders of Yukos were Russian but, like any competent global oligarch, they structured their ownership via multiple offshore entities so – when their company was taken away – they sued. And now, they have won in a process that is a memorial to the 1990s, and the odd alternate reality when globalisation was widely considered a good thing.

Obviously, Russia won’t abide by the judgement on its own territory, but the Yukos shareholders will continue their battles for various assets owned by Russia, such as this plot of land in London and these vodka brand names. “Real justice requires successful enforcement, so we will now focus all our efforts on enforcing against Russian state assets worldwide until every penny of the $65+ billion awards has been paid,” said Tim Osborne, who heads the shareholders’ company, which is called GML.

In that effort, however, he may well have competition. There is 210 billion euros of Russian state money frozen in the European Union, mostly in Belgium, and the EU is inching closer to using it to help Ukraine. The universe in which Russia happily deposited its assets in Western countries now feels like an alternative reality – one that historians will spend a lot of time dissecting.

MAKING CRIMINALS PAY

International arbitration is a tricky game to play, however, or so the owners of P&ID may be feeling. In a complex (and, let’s be honest, rather imaginative) attempt to swipe a lot of Nigeria’s money, this small offshore company obtained a gas processing contract in 2010. Neither side did anything to fulfil the contract, then P&ID sued Nigeria and won a giant compensation award, the size of which has been growing larger still with the interest owed.

It is a case rife with allegations of corruption, professional misconduct and more, and mercifully the  initial judgement in favour of P&ID was overturned. Last week, a court ruled that P&ID will have to pay the vast legal costs in sterling, rather than in naira, which will help Nigeria to avoid missing out on the advantageous exchange rate.

To say P&ID’s British lawyers have questions to answer is to understate how serious the allegations against them are, but regulators have so far done nothing. That is a very bad reflection on Britain’s ongoing facilitation of kleptocracy, and the state of its regulators.

Britain, in common with many other countries, has a very fragmented system of anti-money laundering regulation, so it is potentially good news that the government has proposed to combine many of the existing 23 regulators into “a small number” of bodies. Hopefully, this will mean the regulators are better funded, more motivated, and more willing to anger potentially powerful vested interests by actually investigating financial crime. “It is crucial that existing regulators do not take their foot off the pedal while we await legislation which could risk things getting a lot worse before getting better,” said Sue Hawley, of Spotlight on Corruption.

A version of this story was published in this week’s Oligarchy newsletter. Sign up here.

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A couple of weeks ago I wrote about the U.K.’s seizure of 69,000 bitcoins (that’s worth around $7.7 billion) from a Chinese fraudster, and gave the impression it was a pretty big deal. But then, rather in the manner of Crocodile Dundee and knives, the United States revealed what it was packing.

“The Justice Department’s National Security Division [filed] a civil forfeiture complaint against approximately 127,271 Bitcoin, currently worth approximately $15 billion,” the DoJ announced last week. Now that really is a big deal (it’s not far off the total BP paid to settle charges over the Deepwater Horizon oil spill in the Gulf of Mexico). There can only ever be 21 million bitcoins in existence, so this seizure accounts for more than one in 200 of them.

The seizure was part of a case against Chen Zhi, a Cambodian businessman charged with being behind some of the most appalling forced-labour fraud compounds in Southeast Asia. Every aspect of the alleged scheme, from its targeting of vulnerable people in Western countries, to its reliance on trafficked labourers, is foul on its own but cumulatively, it’s beyond dreadful.

The money laundering techniques were complex and multi-jurisdictional, and the profits were spent on the usual expensive trash: “watches, yachts, private jets, vacation homes, high-end collectables, and rare artwork, including a Picasso painting purchased through an auction house in New York City”.

And of course there were shell companies in the British Virgin Islands and properties in London, because there are always shell companies in the British Virgin Islands and properties in London: a £12 million mansion near Primrose Hill; a £100 million office building in the City; plus various flats in the Centre Point building, and others in Nine Elms, a newly-built neighbourhood where many of the off-plan apartments went to cash purchasers from the Far East. 

(Nine Elms is also, incidentally, home to the new U.S. embassy and a few years ago I did a talk for staffers interested in financial crime and one asked why, if there was so much money being laundered in London, none of it was visible. I drew his attention to the view from the window.)

The U.S. government earlier this year said it will place any bitcoin it seizes into a strategic reserve. I suppose a crypto reserve sort of makes as much sense as a gold reserve, at least until people lose interest in crypto and/or the power goes off. But there is a problem with the basic idea here: these bitcoins don’t belong to the United States. Assuming that the criminal complaints are proven, then this money is the fruit of crimes committed against millions of victims, and should be returned to them, whether in the form of bitcoin or whatever, not stashed away in Washington.

Some commentators have said cryptocurrencies help fight financial crime. In a blog, Elliptic, a blockchain analytics company, argued that “blockchain technology enables comprehensive visibility into financial flows, empowering all ecosystem participants to play a crucial role in identifying and reducing illicit funds.” But I don’t think that’s the message I take from this. 

If the two biggest asset seizures of all time have come one after the other in the form of bitcoin, I think the important question to ask is “why do criminals have so much of their wealth in cryptocurrencies?” If crypto is helping baddies to hide their money more than it’s helping goodies to find it, then it’s more of a problem than it is a solution.

THE PITCAIRN CRYPTO PLAN

Thanks to an Australian reader for tipping me off to an odd situation in the Pitcairn Islands, the only British Overseas Territory (BOT) in the Pacific, and the smallest territory in the world by population. Pitcairn has fewer than 50 inhabitants and is extraordinarily remote so unlike most BOTs – the Cayman Islands, the BVI, Gibraltar, Anguilla, etc – it has never developed an offshore financial services industry.

Anyway, it seems that in January 2020, Justin Sun – the Chinese-born billionaire head of the crypto giant TRON; prime minister of Liberland; first Kittitian in Space; former Grenadian ambassador extraordinary and plenipotentiary to the World Trade Organisation; eater of a $6.24 million banana; and early investor in Donald Trump’s crypto company – explored the possibility of turning Pitcairn into a crypto haven. According to the minutes of the meeting with the island’s council, three of Sun’s representatives were there on a friend-making mission: “TRON is looking to partner with a BOT to work together to craft regulations etc to help make crypto currency more mainstream.” 

There was “a lot of community interest” among the locals for carving up this unexpected cash cow, but fate intervened in the form of a killjoy governor, who represents the U.K. in these parts. “TRON will not be permitted to establish bitcoin/crypto currency”.

According to one academic’s assessment of things, “a company with such a variable track record was never going to be afforded a foothold in the territory.” And, generally speaking, that should have been the end of the matter, leaving us with nothing more than a ghostly alternative timeline in which Pitcairn is a crypto hub (or, perhaps, a 21^st century version of Nauru) and its few-dozen residents are multi-billionaires.

None of this has been confirmed by Tron, so I only have the Pitcairn administration’s documents to go on but it appears that the company did not in fact go away quietly. Instead, in order to “garner favour”, it began to provide solar panels to Pitcairn residents. An attempt by the governor to stop this collapsed, given that everyone really wanted them, and by July 2023, the council’s meeting minutes noted: “we all have solar units donated from TRON on our roofs”.

My Australian interlocutor informs me that Pitcairn residents are unsurprisingly now super-enthusiastic about Tron for having provided them with free electricity, though loath to publicise it. This year Tron advertised for a Project Director (Pitcairn Islands Development) to lead “a humanitarian infrastructure development project aimed at improving the medical and accommodation conditions of 35 indigenous fishermen residing on Pitcairn Island", and is now looking for a “Legal Counsel (Pitcairn Islands Development)”. 

Something’s happening here and I don’t know what it is, but if I worked for the British government I’d be trying to figure it out. Justin Sun’s stated philosophy is underpinned by the libertarian creed of “no forced obligations, no taxes, and no mandates”. It would be a challenging development if, now that he’s provided Pitcairn with free power, he managed to bring the islanders around to that point of view. 

A version of this story was published in this week’s Oligarchy newsletter. Sign up here.

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There are now several books about the 2007-8 financial crisis, the best of which, in my opinion, is Adam Tooze’s ‘Crashed’. But the one that everyone remembers is Michael Lewis’s ‘The Big Short’, later made into a movie starring Christian Bale, Ryan Gosling, Steve Carell and Brad Pitt. Its narrative of misfits spotting the mistake everyone else was making is pleasing and elegant, so it’s easy to see why it’s so popular. 

Sadly, however, it’s completely wrong: bankers didn’t sell insanely risky financial instruments because they misunderstood them, but because the trade was profitable, and they didn’t care if they might blow up the world. 

And this brings me to some recent headlines in the FT – “Companies load up on niche crypto tokens to boost share prices” and “Crypto lenders dial up risk with ‘microfinance on steroids’” – which have very strong pre-2007 energy. Anyone with a brain knows this will end up in disaster, but folks with money want to keep dancing while the music plays, particularly as the United States has cranked up the volume.

“When President Trump took office in January, he promised to make America the ‘crypto capital of the world’. Today, the President’s Working Group on Digital Asset Markets is releasing a report that provides a roadmap to make that promise a reality,” pledged the White House last week in a new strategy document

Perhaps the idiocy of this strategy can be best understood by pointing out its reference to “Operation Choke Point 2.0”, a confected scandal named after another confected scandal. The reason banks denied services to crypto companies is because cryptocurrencies are frequently used to enable, commit and spread financial crime, so it was an entirely sensible decision. And yet here’s the White House repeating the branding dreamt up by lobbyists to claim it was some kind of campaign against free speech. Crypto, of course, being the answer to the alleged erosion of freedoms.

The crypto boom may in fact be worse than the mortgage-backed feeding frenzy that preceded 2007-8, because the technology is not just setting us up for a new crash but freeing civilisation’s enemies from the few checks upon them. 

BOOSTING FRAUD WITH BLOCKCHAIN

Back in May, FinCEN designated Cambodia’s Huione group as being of “Primary Money Laundering Concern”, to reflect its role as the epicentre of fraud in Southeast Asia. Once upon a time, a designation like that was enough to kill a dirty bank (such as Latvia’s ABLV). But for a marketplace that lives on Telegram and trades on the blockchain, it appears to make little or no difference. “Transaction data shows no meaningful decline. In fact, our data shows continued or even increased activity,” concluded Chainalysis about Huione’s fortunes.

Meanwhile, the rouble-denominated stablecoin A7A5 is transferring more than a billion dollars’ worth of value a day, in what is becoming a magnificently successful sanctions evasion scheme that dodges any possible controls. And that’s before we come onto the “coin swap services” that allow criminals to move value around without encountering any responsible nodes in the crypto system at all.

“A sizable proportion of the $3.6 billion in illicit and high-risk funds flowing through coin swap services originates from darknet markets, ransomware, credit card fraud, hacks, Russian military fundraisers operating in Ukraine, and online gambling. A significant proportion also relates to sanctioned activity, including North Korean money laundering,” notes Elliptic.

When I was in Washington DC a few months ago I had several troubling conversations with crypto people, who were distinguished above all by their complete refusal to accept the existence of any downsides to the spread of blockchain technology, or any benefits to the traditional financial architecture based around banks it would replace. I am, as anyone who has read my books will know, no fan of banks but governments are really going to miss the ability to monitor, control and block the movement of money when it’s gone.

SANCTIONS OVERREACH

Of course, the uneasy secret underlying most anti-money laundering policy is the amount of discretion it gives governments to poke around in our private lives, and how little right we have to appeal against it (this is what the original Operation Choke Point,, and the frustration around it, was about). We are therefore rather dependent on politicians not abusing these powers for their own ends. Which is unfortunate in the circumstances.

“Alexandre de Moraes has taken it upon himself to be judge and jury in an unlawful witch hunt against U.S. and Brazilian citizens and companies,” said Secretary of the Treasury Scott Bessent, in a statement announcing sanctions against the Brazilian judge who’s investigating former President Jair Bolsonaro on charges of attempting a coup.

There is a grotesque irony in the fact that these misguided sanctions are being enacted using the Sergei Magnitsky Act, which is intended to punish corruption and human rights abuses. Perhaps the lesson we need to learn is that there needs to be better oversight of all the powers we give to our governments. 

Considering the decades-long disastrous consequences caused by well-intentioned but badly-designed anti-money-laundering policies – not least the wholesale exclusion of Muslim charities from the banking system – this could end up being a good thing. Just looking for a silver lining here.

A DYSTOPIC DREAM DIES?

I was listening to ‘In the Studio’, the excellent BBC podcast, when what should pop up but an episode on Neom, the ridiculous linear city concept apparently inspired by the 1997 Bruce Willis movie ‘The Fifth Element’, though without the punkish charm. In case you haven’t heard of Neom, it’s “an experiment in urban living”, which will extend two parallel lines of mirrored skyscrapers across 100 miles of Saudi desert, an idea so hellish that even JG Ballard would surely reject it out of hand.

Anyway, it appears the government in Riyadh has realised that spending a trillion dollars or more on some architectural fever dream might be a bad idea. “They’re finally starting to make financially sound decisions,” a consultant told CNBC.

I have been slightly obsessed with Neom for a while, and my (least) favourite bit is always when the architects wax lyrical about Mohamed bin Salman – the delicacy of his vision, the profundity of his understanding – and then clam up as soon as someone asks whether it’s right for his government to sentence people to death for resisting eviction from their ancestral homes so this horrific new city can be built. 

A version of this story was published in this week’s Oligarchy newsletter. Sign up here.

The post A Crypto-fueled Crash, How Blockchain Blunts Sanctions & MBS’ Folly appeared first on Coda Story.

No one becomes an anti-corruption activist to make money, least of all in Ukraine. When I first met the co-founders of the Anti-Corruption Action Center – Vitaliy Shabunin and Daria Kaleniuk – back in 2014, they were already veterans of state persecution, and have become only more experienced in the decade since.

AntAC has pioneered and pushed through many of the reforms that have helped Ukraine to become more transparent and less corrupt, leading to the creation of new courts, new laws, new law enforcement agencies, and much more. And this is why it is so alarming that Shabunin has been arrested and his home searched, on the transparently absurd premise that he was dodging military service, while he was following an order from his superior officers to be seconded to the National Agency for Corruption Prevention.

“We strongly believe that, in addition to illegal persecution, these searches are an attempt by the authorities to obtain information about the Anti-Corruption Action Centre’s activities,” said the AntAC. “The goal is simple – to undermine our activities aimed at exposing government corruption.”

It is easy to condemn corruption by your opponents, but sadly easy to excuse it in your friends, particularly in wartime. AntAC’s consistent refusal to go easy on anyone – for example, over the government’s recent refusal to follow the law over the leadership of the Economic Security Bureau of Ukraine – has won it many enemies, but even its critics recognise how central it has been to Ukraine’s democratic development.

“The actions of the pre-trial investigation bodies can be considered either as complete incompetence of officials and unsuitability for their positions, or as a deliberate attack aimed at putting pressure on Vitaliy Shabunin, who continued to criticise the work of state bodies while serving in the military,” said 90 Ukrainian NGOs in a joint statement. 

Western foreign officials need to raise Shabunin’s case with their Ukrainian counterparts and continue raising it until this case is dropped. If Ukraine wants to keep receiving support as a democracy fighting a dictatorship, it needs to keep acting like a democracy, and that means its leaders being willing to hear things they don’t want to hear.

THE U.S., A CRYPTO-POWERED TAX HAVEN?

So the European Union’s Anti-Money Laundering Authority is up and running, and one of its first acts has been to warn about the risk posted by cryptocurrencies in its 2025 work programme. Bruna Szego, AMLA’s chair, added that national regulators need to regulate crypto companies as stringently as they do anything else, and that big crypto companies were likely to be among the 40 institutions that AMLA will directly supervise, along with the continent’s largest banks.

The view from the UK is similar. “The risk of money laundering through cryptoassets has increased significantly since 2020 with cryptoassets increasingly appearing in money laundering intelligence over this period. Cryptoassets are increasingly used for laundering all forms of proceeds of crime,” states the country’s newly-published money laundering risk assessment. “The international nature of the blockchain and cryptoasset transactions present unique difficulties in conducting effective enforcement against criminal actors.”

For anyone with a passing acquaintance with money laundering, all of this is completely non-contentious. However, it is hard to square this caution with what’s happening in the United States. Trump’s own crypto company is expanding its business, U.S. regulators are now cool with retirement accounts holding crypto, and yet another big crypto firm is looking to sell shares on the stock exchange. The technology’s boosters are feeling confident, and presenting blockchain as central to national security.

I see cryptocurrencies as near perfect tools for criminals and tycoons to escape the rules democracies put in place to prevent them from owning everything and bribing everyone. But I can also appreciate the artistry of the efforts of the Digital Chamber to boost its members’ business interests by arguing that they’re for the good of the United States and therefore for the good of humanity (for are those two causes not one and the same?).

“It is TDC’s position that blockchain technology supports global economic freedom by empowering those who resist tyranny around the world,” said the Chamber, one of the biggest crypto lobbyists in Washington, DC.

I don’t know what’s worse: that people say this stuff without believing it, or that they actually believe it. Being able to move money in secret may theoretically empower everyone, but in reality it disproportionately empowers already rich people. The U.S. is turning itself into a blockchain-powered tax haven at any incredible rate. Cartels, kleptocrats, oligarchs, spies, plutocrats, these are the real long-term beneficiaries from cryptocurrencies, and if we don’t realise that soon then the rest of us will pay a heavy price for Washington’s capitulation to their lobbyists.

THE U.K., TWO STEPS FORWARD, ONE STEP BACK

Britain, meanwhile, continues its inch-by-inch progress towards a less dirty financial system. It has dissolved 11,500 companies that did not abide by newer, more stringent rules around transparency, closed three company formation agents, and barred several people from working in corporate formation again. For those of us used to how appallingly lax things used to be, this is all rather good to see, if hard to believe (they do, after all, have previous when it comes to boasting about things they shouldn’t be proud of).

The government is planning a summit on countering illicit finance which, coupled with a surprisingly good-looking series of proposals for getting dark money out of politics, feels weirdly hopeful for a country with a tendency to err on the side of letting dirty cash go wherever it likes. I anticipate that counterbalancing bad news will be along next week.

Still, while I’m being optimistic, I’ll give a shout out to The Latimer Network, which brings together experts and practitioners in countering illicit finance from the U.K. and beyond, with the aim of improving how that is done. One of its particular focuses is on trying to think of a better way of identifying money laundering than the current workhorse: the Suspicious Activity Report (SAR). 

Tens of millions of SARs are filed globally each year, supposedly to alert the authorities to transactions that look dodgy. That is far too many to read, and most of them are valueless anyway, and it would be great to come up with a better way of monitoring transactions, so that criminals are excluded from the financial system. And don’t tell me it’s blockchain.

However, if you’d like an insight into some of the problems facing the British government, here’s a piece I wrote on the absolute disaster that is the national water system. You wouldn’t have thought you could mess up the water supply in a country where it rains so much, and yet, here we are.

A version of this story was published in this week’s Oligarchy newsletter. Sign up here.

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I am a regular listener to Ezra Klein’s podcast, and I’m a fan. There should be more podcasts that treat serious issues seriously, but there’s something he said back in April when talking about the root cause of problems on the Left of politics that has concerned me since I heard it. “It’s not just the fault of money in politics, because there’s money on all sides of the issues. There’s something else going on,” he said.

That concerned me because it encapsulated a mistake that’s often made about why political funding is problematic. It’s often assumed that the only problem is that rich people can buy support for an issue they care about, so it’s therefore often missed – as Klein did – that a far bigger problem is that they define what is considered an issue in the first place.

You could look at the fact that billionaires supported both Republicans and Democrats in last year’s presidential election (although far more money went to Republicans), and conclude that – since both sides got money – it’s not a big deal. Or you could wonder which issues don’t get attention because no one with money is interested in them being discussed.

Five years ago, when I’d just started writing this newsletter, I made a big thing out of the fact that three people owned more than $100 billion. Centi-billionaires were new back then, but they’re old hat these days. Some 18 people have passed that threshold now, and more will be along to join them very soon. Oxfam predicts there will be five trillionaires by the end of the decade, and that was before Donald Trump’s tax cuts were passed by Congress.

Last year, here in the U.K., it looked like Keir Starmer actually understood the importance of protecting politics from the corrupting effect of money, but he’s failed to actually follow through. “Time and again, Labour’s warm words about cleaning up politics have not translated into action. Rather than rebuilding faith in democracy, Starmer’s listlessness risks eroding it even further,” wrote the journalist Peter Geoghegan last week.

Meanwhile, over in France, billionaire wealth has already nosed its way into politics and is helping to raise the profile of the Far Right. 

“Media groups, at the hands of a few powerful men,” wrote one observer late last year, “are actively shaping the political discourse in a way that normalises far-right narratives and talking points. By giving disproportionate airtime to far-right figures and framing their extremist positions as legitimate responses to France’s social and economic challenges, these media outlets are gradually shifting public opinion.”

It's a sign of this shift in opinion that the asset manager Aberdeen (fresh from cancelling a rebrand to ‘abrdn’, which cost an estimated £500,000) has decided to sack the independent board of the Financial Fairness Trust, which has supported organisations researching the effects of inequality. A few years ago, that kind of philanthropy was a cheap way to look like the kind face of capitalism. These days, I’m not sure anyone cares.

Back when I was a cub reporter, an old-timer gave me some advice: “don’t write about process, nobody cares about process, write about results”. It’s good advice for someone trying to write articles, but it’s bad advice more broadly, because process is important. The process of drafting regulation is when laws get defined; the process of crafting the rules that will guide the implementation of laws is when questions get resolved. The power of billionaires is that they can afford to employ people to monitor that process, and to make suggestions. If the rest of us don’t care, the world will be stolen from us without any of us noticing.

And once it’s stolen, it’ll stay stolen. Thanks to impenetrable financial structures like a trust registered in South Dakota, the super-rich can keep their wealth safe in perpetuity. When I first wrote about South Dakotan trusts, back in 2019, there was around $350 billion squirreled away in the Mount Rushmore State. That total has now hit $815 billion, having risen by $100 billion in the last year alone.

“It’s going to go on for—the estimates vary — 10 to 15 more years. But, there’s a huge transfer underway from the boomer generation to the next generation," said Bret Afdahl, the director of the state’s Banking Division.

Sometimes it can be hard to stay optimistic.

THE IMAGINARY BANKER

Here’s a weird story: “meet Barbarat Giuseppe, the world’s most prolific banker. He’s run most of the world’s largest banks … Mr Giuseppe’s spectacular career is spoilt only by the small detail that it’s all fraudulent”.

Guiseppe may not actually exist, but he’s been able to create a series of U.K.-registered companies with the same name as major financial institutions: UBS, Goldman Sachs, and so on. When he’s been caught, he’s just created new familiar-sounding companies, perhaps as part of a money laundering scheme, though it’s not immediately clear how it would help.

“We need to see prosecutions. Skip the hard stuff of finding victims of fraud. Do an “Al Capone” and prosecute the easy offences instead,” writes Dan Neidle’s Tax Policy Associates. Amen to that.

It’s a story that shows that, despite attempted reforms, there are still major problems with many aspects of the U.K.’s company formation system. “The foundations for a successful regime are now in place, however it will take a concerted effort from across the economic crime architecture to deliver results,” wrote Transparency International’s Ben Cowdock.

RUSSIA’S BLOCKCHAIN BET

Last week, I wrote about how Russia was moving money via crypto and Kyrgyzstan to evade Western restrictions on its financial sector, and here’s an interesting analysis of the phenomenon. “Russia is building a parallel financial system using blockchain as its backbone,” writes analysts from Astraea. “This network presents a growing challenge for regulators and underscores the urgency of developing coordinated international responses to crypto-based sanctions evasion.” 

A version of this story was published in this week’s Oligarchy newsletter. Sign up here.

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Ukraine's Cabinet of Ministers rejected a nominee to lead the economic crimes agency, drawing swift criticism from lawmakers and businesses over alleged interference in the selection process.

The agency, the Bureau of Economic Security, was created in 2021 to investigate economic crimes. It has since faced accusations of being used to pressure — and in some cases extort — businesses, prompting multiple calls and efforts to overhaul it.

Selecting a new director of the agency by the end of July is one of Ukraine's obligations to the EU and International Monetary Fund as part of international financing packages extended to the war-torn country by the institutions.

As part of a recent attempt to relaunch the bureau, Oleksandr Tsyvinsky on June 30 was officially nominated by the bureau's selection commission that consists of six members — three from the government and three international experts. Tsyvinsky is known for exposing schemes involving illegal land seizures in Kyiv..

But Ukraine's government on July 8 said it had rejected Tsyvinsky following alleged concerns raised by the country's intelligence service of potential Russian connections.

The government unanimously decided to ask the commission to submit two new candidates who meet all security requirements, the government press service wrote on its official Telegram channel, a move it claims aligns with the law.

Following Tsyvinsky's nomination, it was revealed that his father holds a Russian passport. He has said he hasn't spoken to his father, who lives in Russia, in years.

Tsyvinsky holds clearance for state secrets and has passed special vetting, backed by over 20 years in law enforcement, including nearly a decade at the National Anti-Corruption Bureau of Ukraine (NABU).

Opposition lawmaker Yaroslav Zhelizniak, said the government had no grounds to reject a properly nominated candidate, claiming President Volodymyr Zelensky's office is behind the blocking of the nomination.

"The (bureau's) legislation provides no legal grounds for the cabinet to demand a new shortlist or impose additional, undefined requirements such as 'security criteria.' The term itself is absent from any statute and therefore has no legal force," Zhelizniak said.

"The SBU letter in this case is nothing more than an indicator of the winner's disloyalty to the President's Office and a desire to block the appointment," said Olena Shcherban, deputy executive director of the AntAC in a statement following the news.

Major business associations have called on Zelensky, Parliament Speaker Ruslan Stefanchuk, and Prime Minister Denys Shmyhal to reverse the government's decision.

The business groups warned that failing to reform the agency will harm investment decisions, particularly as Ukraine's wartime economy needs to attract capital.

"War is a time for radical changes in the rule of law and business climate, otherwise the economy cannot ensure the country's survival," the businesses wrote in an open letter.

‘Neither side wasted time’ — Ukraine’s economy minister on minerals deal negotiations with Trump’s ‘business-oriented’ administration

Ukraine’s Economy Minister Yuliia Svyrydenko says her task is simple — to get the investment fund behind the closely watched minerals deal with the U.S. off the ground, and prove its detractors wrong. “There are so many criticisms from different parties that this fund is just a piece of paper we can put on the shelves — that it won’t be operational,” Svyrydenko, who is also Ukraine’s first deputy prime minister, tells the Kyiv Independent at Ukraine’s Cabinet of Ministers on July 4, the morning

The Kyiv IndependentLiliane Bivings

A former deputy chief of the Russian army's General Staff, Colonel General Khalil Arslanov, was sentenced to 17 years in prison on July 7 over a scheme involving the theft of over 1 billion roubles ($12.7 million) from Defense Ministry contracts, Russia's state-owned TASS news agency reported.

A closed-door military court found Arslanov and others guilty of embezzling millions from state contracts with Voentelecom, a company providing telecommunications services to the Russian military.

Arslanov was also convicted of extorting a 12 million rouble ($152,400) bribe from the head of a military communications company. Two co-defendants, Colonel Pavel Kutakhov and military pensioner Igor Yakovlev, received seven and six years in prison, respectively.

Arslanov, a former head of the Russian military's communications unit, served as deputy chief of the army's General Staff from 2013 until his removal in 2020 and was named a colonel general in 2017.

This high-profile conviction is the latest in a series of corruption scandals that have implicated top echelons of the Russian military establishment over the past year. Russia has significantly stepped up prosecutions of senior defense officials.

Just last week, on July 1, former Russian Deputy Defense Minister Timur Ivanov was sentenced to 13 years in a penal colony after being found guilty of corruption. It was the harshest verdict in a series of high-level military corruption cases until Arslanov's sentencing on July 7.

Authorities initially detained Ivanov in April 2024 on bribery allegations, later adding embezzlement charges in October. His trial, like Arslanov's, was held behind closed doors reportedly due to national security concerns.

Ivanov's co-defendant, Anton Filatov, a former logistics company executive, received a 12.5-year sentence.According to state media, the embezzled amount totaled 4.1 billion roubles ($48.8 million), primarily funneled through bank transfers to two foreign accounts. Ivanov pleaded not guilty.

The court stripped him of all state honors and ordered the confiscation of property, vehicles, and cash valued at 2.5 billion roubles, including a luxury apartment in central Moscow, a three-storey English-style mansion, and a high-end car collection featuring brands like Bentley and Aston Martin.

Russia striking NATO while China invades Taiwan ‘plausible’ scenario, experts say

If Beijing moves against Taiwan, NATO might soon find itself in a two-front war with China and Russia — or so the alliance’s secretary general believes. “If Xi Jinping would attack Taiwan, he would first make sure that he makes a call to his very junior partner in all of this, Vladimir Vladimirovich Putin… and telling him, ‘Hey, I’m going to do this, and I need you to to keep them busy in Europe by attacking NATO territory,’” Secretary General Mark Rutte said in a July 5 interview with the New

The Kyiv IndependentMartin Fornusek

Editor's note: This article was updated to include comments from Ukraine's Deputy Prime Minister Oleksii Chernyshov.

Deputy Prime Minister and National Unity Minister Oleksii Chernyshov will keep his position after a decision from the High Anti-Corruption Court on July 2, despite an ongoing corruption investigation.

Chernyshov is a suspect in a "large-scale" illegal land grab corruption case. After a court hearing on June 27, he was banned from traveling abroad without permission and slapped with a bail set at Hr 120 million ($2.9 million) while awaiting trial.

Despite Cheryshov’s defense appealing the bail, it was paid in full shortly after the July 2 hearing,  Olesya Chemerys, spokesperson for the High Anti-Corruption Court, told Ukrainian media Ukrainska Pravda. July 2 was the last day to pay the bail.

Prosecutors filed a motion for his removal on June 27. The day before, he told the Kyiv Independent that he denied the allegations and would not step down from his job.

"I definitely respect the court’s decision. At the same time, I will use all legal means to defend myself in court further and to protect my name and reputation," Chernyshov told the Kyiv Independent after the hearing on July 2.

Chernshov is the highest-ranking official in Ukrainian history to face such charges while in office, attracting a lot of eyes to the case. He is also considered a close ally of President Volodymyr Zelensky, marking a major accusation against the president’s inner circle.

Chernyshov has headed the National Unity Ministry since December, which was previously named the Reintegration of Temporarily Occupied territories Ministry, to strengthen ties with the Ukrainian diaspora. It was initially unclear why the ministry was created and what Chernyshov’s responsibilities were.

Earlier this week, several Ukrainian MPs, including lawmaker Yaroslav Zhelezniak, speculated that the ministry could be dismantled due to Chernyshov’s case.  Zhelezniak believes that the ministry is not needed and was created with the political goal of securing a position for Cherynshov, reported Radio Svoboda.

For now, Chernyshov says that the ministry will continue to operate as usual. "We have a lot of important work ahead, and stay dedicated to our values and tasks," he told the Kyiv Independent on July 2.

Speaking to reporters after the court dismissed the motion for his removal, Chernyshov said he had "collected funds" to pay the bail as his personal accounts are blocked.

The court’s decision to keep Cheryshov in place has raised concerns among the Anti-Corruption Action Center, a Kyiv-based watchdog. With Chernyshov still acting as deputy prime minister, he could potentially use his position to influence the court’s decision going forward in the case, said Olena Shcherban, deputy executive director at ANTAC.

"The logic of the court is currently completely unclear to me, as are the motives — but given the high profile of the position and Chernyshov being close to the president's entourage, I do not exclude that the court could be influenced," Shcherban told the Kyiv Independent.

"Whether this will affect the case is not yet known; it all depends on whether Chernyshov will still influence witnesses and use his position to save himself — and I think he will definitely use it," she added.

According to the National Anti-Corruption Bureau (NABU) investigation, during his time as communities and territories minister in 2020-2022, Chernyshov and his associates undervalued land plots to benefit a developer in exchange for kickbacks.

Chernyshov and his accomplices allegedly received "significant" discounts on apartments in existing buildings, totaling over Hr 14.5 million ($346,000), from the developer. The actions cost Ukraine Hr 1 billion ($24 million), according to NABU.

Chernyshov first raised eyebrows after he left the country on a business trip days before law enforcement unveiled the charges and detained two of his close associates. Despite suspicions that he had fled the country to avoid arrest, he returned to Ukraine on June 22 and was summoned to NABU the following day.

During the court hearing, NABU and the Specialized Anti-Corruption Prosecutor's Office (SAPO) requested that Chernyshov be suspended from office and that the court set bail of Hr 120 million ($2.9 million).

The two offices also requested additional measures restricting his movements, including that he hand in his passport and wear an electronic monitoring device.

Top Russian defense official gets 13 years in graft crackdown

Authorities detained former Russian Deputy Defense Minister Timur Ivanov in April 2024 on bribery allegations, later adding embezzlement charges in October.

The Kyiv IndependentOlena Goncharova

Former Russian Deputy Defense Minister Timur Ivanov was sentenced on July 1 to 13 years in a penal colony after being found guilty of corruption—the toughest sentence so far in a string of graft investigations involving high-level defense officials.

Authorities detained Ivanov in April 2024 on bribery allegations, later adding embezzlement charges in October. Over a dozen individuals, including two other former deputy ministers, have been implicated in separate investigations.

The trial was held behind closed doors due to national security concerns. Ivanov’s co-defendant, Anton Filatov, a former logistics company executive, received a 12.5-year sentence. According to state media, the embezzled amount totaled 4.1 billion roubles ($48.8 million), largely funneled through bank transfers to two foreign accounts.

Ivanov pleaded not guilty. The court stripped him of all state honors and ordered the confiscation of property, vehicles, and cash worth 2.5 billion roubles. Reports in Russian media described his and his wife’s assets, including a luxury apartment in central Moscow, a three-storey English-style mansion outside the city, and a high-end car collection featuring brands such as Bentley and Aston Martin.

Prominent Russian war correspondents known as "Z-bloggers" have publicly condemned the corruption exposed within the defenae sector, especially as the war in Ukraine continues. One of them, Alexander Kots, acknowledged that 13 years is a long sentence but argued that corrupt  officials should face trial during wartime as "traitors to the Motherland."

Since 2016, Ivanov oversaw large logistics contracts at the defence ministry, including those tied to property, housing, and medical support.

He served under Sergei Shoigu, who was replaced as defence minister last year but remains influential as the secretary of Russia’s Security Council. Authorities have also arrested two of Shoigu’s other former deputies in separate cases. In April, a court sentenced Lieutenant-General Vadim Shamarin, the former deputy head of the army’s general staff, to seven years for accepting bribes worth hundreds of thousands of dollars.

The wave of prosecutions reflects what appears to be President Vladimir Putin’s effort to address corruption, inefficiency, and waste in Russia’s expansive military budget, which accounts for 32% of federal spending this year.

Ukraine’s new interceptor UAVs are starting to knock Russia’s long-range Shahed drones out of the sky

Russia’s Shahed drone swarms are pummeling Ukraine on a nightly basis, inflicting ever more death and destruction in cities that had managed to carve out some sense of normalcy amid wartime. Civilian alarm has grown. With traditional air defense stockpiles running low, the government is banking on newly created

The Kyiv IndependentKollen Post

Police aggressively dispersed protestors at an anti-government rally in Belgrade, whereover 100,000 demonstrators gathered on June 28 to demand snap elections.

The rally marks the latest mass action in a protest movement that started last fall, with activists calling for an end to corruption and the 12-year rule of Serbian President Aleksandar Vucic.

Crowds in Belgrade on June 28 chanted "We want elections!" — a key demand of the movement that Vucic has consistently refused. His term ends in 2027, which is also the date of the next scheduled parliamentary elections.

Police officers in riot gear used tear gas, pepper spray, and stun grenades to forcibly dispersed crowds, according to multiple media outlets. Dozens of protestors were detained, though the police did not provide an exat number.

Serbian Interior Minister Ivica Dacic claimed that demonstrators attacked the police.

Protestors reportedly threw eggs, plastic bottles, and other objects at riot officers blocking the crowd from entering a city park where Vucic supporters were staging a counterprotest. Vucic reportedly bused in groups of his own supporters from around the country ahead of the rally.

As protests engulf Serbia, President Vucic looks for support East and West

Editor’s Note: Following a number of attacks against peaceful protestors in Serbia, the Kyiv Independent agreed to not publish the last names of people who gave comments for this story. BELGRADE, Serbia — Thousands of protestors walked 300 kilometers on March 1 from Belgrade to the southern city of Nis to

The Kyiv IndependentCamilla Bell-Davies

Vucic, a right-wing populist leader with authoritarian tendencies and warm ties with Russia, has repeatedly accused foreign states of inciting the protests in order to topple his government. He is provided no evidence to support these claims.

The current wave of protests in Serbia began in November, when a train station roof in the town of Novi Sad collapsed, killing 15. The disaster was blamed on government corruption.

While Vucic has alleged that Western powers are trying to trigger a "Ukrainian-style revolution in Serbia," the Serbian protests are not markedly pro-Ukrainian or pro-Russian. Unlike mass demonstrations in Slovakia, where activists explicitly condemned the government's Kremlin-friendly agenda, the Serbian movement is focused on Vucic's corrupt leadership.

Since Russia's full-scale invasion of Ukraine in 2022, Serbia has attempted to navigate a delicate diplomatic path between Moscow and the West. It has positioned itself as neutral in the Russia-Ukraine war and balanced its status as an EU candidate with its longstanding ties to Russia.

Vucic made his first official visit to Ukraine on June 11.

Ukraine’s new top prosecutor known for high-profile cases, seen as Zelensky loyalist

Loyalty to the incumbent administration has been the key requirement for prosecutor generals in Ukraine. Ruslan Kravchenko, who was appointed as prosecutor general on June 21, appears to be no exception. Previously he had been appointed as a military governor by President Volodymyr Zelensky and is seen as a presidential loyalist. Kravchenko became Ukraine’s top prosecutor after a lengthy hiatus during which the position of prosecutor general remained vacant. His predecessor, Andriy Kostin, r

The Kyiv IndependentOleg Sukhov

A former deputy mayor for Kharkiv is facing multiple charges related to creating and leading a scheme that allegedly embezzled 5.4 million hryvnias ($130,000) of budget funds allocated for fortifications, law enforcement agencies announced on June 28.

Ukraine's military as well as public officials has seen several corruption scandals since the start of Russia's full-scale war, related to illicit enrichment, money laundering, bribery, and misconduct of the command.

A total of four people, including two company heads and two entrepreneurs, were arrested alongside the former official, the National Police said.

The scheme allegedly involved a shell company procuring purchased materials for fortifications at prices over 30% above market value.

While authorities did not name the former official, Ukrainska Pravda reported, citing law enforcement sources, that the suspect in question is Andrii Rudenko, Kharkiv's Deputy Mayor for Housing and Communal Services between 2015 and 2024.

Authorities did not publicly release the identities of the remaining suspects.

The five suspects are currently facing charges under 17 articles of Ukraine's Criminal Code, with motions filed to impose pre-trial detention without bail.

It was not immediately clear as to the maximum sentence the suspects may receive if found guilty, however, Ukraine's Prosecutor General Ruslan Kravchenko said that he will seek for "stolen budget funds must be fully returned to the state."

Law enforcement agents have previously arrested Kharkiv officials with corruption related charges.

In April, authorities charged a total of eight individuals, including local officials and entrepreneurs, accused of colluding with contractors to supply firewood to the military at prices significantly above market value. Several officials and entrepreneurs of housing and utilities departments in several regions, including Kharkiv, were allegedly implicated.

Ukrainian drone strike on Crimea air base destroys 3 Russian helicopters, SBU claims

The attack destroyed Mi-8, Mi-26 and Mi-28 attack helicopters, and a Pantsyr-S1 self-propelled anti-aircraft missile and gun system, the Security Service of Ukraine told the Kyiv Independent.

The Kyiv IndependentKateryna Denisova

Ukraine's National Anti-Corruption Bureau (NABU) and the Specialized Anti-Corruption Prosecutor's Office (SAPO) have filed a motion with the High Anti-Corruption Court seeking to impose bail and suspend Deputy Prime Minister Oleksii Chernyshov from office, NABU's press service reported on June 27.

Chernyshov was officially named a suspect on June 23 in what NABU called a "large-scale" illegal land grab case. Chernyshov heads the new National Unity Ministry in charge of returning refugees and is a close ally of President Volodymyr Zelensky. He left Ukraine days before law enforcement revealed a massive corruption scheme and detained two of his former close associates — Maksym Horbatiuk and Vasyl Volodin.

Investigators allege that Chernyshov and his associates undervalued the land fivefold, costing the state Hr 1 billion (about $24 million), and received discounted apartments worth over Hr 14.5 million ($346,000) in return. In a comment to the Kyiv Independent, Chernyshov has denied the allegations and said he has no plans to step down.

The agencies are requesting that Chernyshov be placed under a bail measure of Hr 120 million ($2.8 million) and be formally removed from his current post while the investigation proceeds.

The agencies said the proposed measures reflect the risks identified during the investigation, including concerns about potential obstruction of justice. They emphasized that their motion aligns with the court's precedent in similar high-profile corruption cases.

The motion also requests that Chernyshov be subject to standard obligations, including a travel ban, passport surrender, and mandatory cooperation with law enforcement. SAPO additionally urged that he be prohibited from contacting other suspects or witnesses in the case.

The agency noted that Chernyshov returned to Ukraine voluntarily and responded to their summons.

If the court upholds the request, Chernyshov would be required to pay the bail within five days. Failure to do so or breach of the imposed conditions could result in a more severe pre-trial measure, prosecutors said.

Chernyshov returned to Ukraine on June 22 following growing public pressure and reported to NABU the following day. Despite his claim that he had been on a scheduled business trip, critics accused him of attempting to evade charges.

Chernyshov is considered a close ally of Zelensky and has held several high-profile roles, including CEO of state-owned oil and gas giant Naftogaz.

Exclusive: Ukrainian deputy prime minister suspected of corruption says he won’t step down

Ukrainian minister and deputy Prime Minister Oleksii Chernyshov has been formally named a suspect in a high-profile illegal land grab case, becoming the highest-ranking official in Ukrainian history to face such charges.

The Kyiv IndependentDominic Culverwell

Ukrainian Deputy Prime Minister Oleksii Chernyshov on June 23 was formally named a suspect in a high-profile illegal land grab case, becoming the highest-ranking official in Ukrainian history to face such charges while in office.

After reports and public speculation around Chernyshov's potential involvement, the National Anti-Corruption Bureau (NABU) released a statement announcing that he was the sixth suspect in a “large-scale” corruption scheme led by a property developer from Kyiv who illegally claimed a land plot to build a residential complex.

In a comment to the Kyiv Independent, Chernyshov denied the accusations against him. "I'm absolutely not involved in that (scheme) — that's clear," he said.

He also said he won't step down from his post. "I will stay in this position," Chernyshov told the Kyiv Independent.

Chernyshov, who heads the new National Unity Ministry in charge of returning refugees, is a close ally of President Volodymyr Zelensky. He raised eyebrows in Ukraine after leaving the country days before law enforcement revealed a massive corruption scheme and detained two of his former close associates — Maksym Horbatiuk and Vasyl Volodin.

According to the anti-corruption agency, during his time as communities and territories minister in 2020-2022, Chernyshov and his associates undervalued land plots by five times to benefit the developer, which Ukrainian media identified as Serhii Kopystyra, allegedly costing the state Hr 1 billion ($24 million).

In exchange, NABU says the developer gave kickbacks to Chernyshov and his accomplices with "significant" discounts on apartments in his existing buildings, totaling over Hr 14.5 million ($346,000). Ukrainian news site Ukrainska Pravda reports this took place between 2021-2022.

NABU and Ukraine's Specialized Anti-Corruption Prosecutor's Office (SAPO) seized the plot to prevent the scheme. Most of the illegally obtained apartments have been seized.

Chernyshov arrived back in the country on June 22 after suspicions mounted in Ukraine that he was on the run and avoiding detention.

"I was definitely on a business trip and I was not escaping out of Ukraine," Chernyshov told the Kyiv Independent. "The rumors of me not returning are nothing but manipulation. I came exactly once my trip was over. I had a very intensive trip in Europe."

Chernyshov claims he was targeted by a "smear campaign" but said he didn't know who could be behind it.

He also said that he came back on his own accord and denied that anyone had asked him to return.

The minister arrived at the NABU offices on June 23, after the agency summoned him to be charged. Upon leaving the bureau, Chernyshov wrote on Facebook that he had a “constructive chat” with detectives and will cooperate with the organization.

An investigation into Chernyshov and two of his associates took place last year after suspicions arose, according to Ukrainska Pravda, with the agency obtaining a warrant to search Chernyshov's home.

But sources in anti-corruption agencies told Ukrainska Pravda that the head of NABU, Semen Kryvonos, blocked police searches due to his close relationship with Chernyshov, who was his boss when Kryvonos headed the State Architecture Inspection, an agency that was subordinated to Chernyshov's former ministry.

Searches allegedly took place a few weeks ago, after a one-year delay, according to Ukrainska Pravda.

Chernyshov said that while he knows Kryvonos in a professional manner, the two are not in contact. He added that the allegations against Horbatiuk and Volodin look "quite serious" but that it was for law enforcement to decide if their detention is justified.

He was appointed head of state-owned energy giant Naftogaz in 2022 after the dissolution of the Communities and Territories Development Ministry. He became the national unity minister in December 2024, a ministry created from scratch.

Chernyshov is widely believed to have a personal friendship with Zelensky. According to a report by Ukrainska Pravda, he was among only a handful of guests invited to celebrate Zelensky's birthday during the Covid-19 pandemic in 2021 — and the only member of the Cabinet of Ministers in attendance.

"The key thing is that today NABU and SAPO have actually reached the immediate circle of the president's 'family,'" Olena Shcherban, deputy executive director at the Anti-Corruption Action Center (ANTAC), a Kyiv-based watchdog, told the Kyiv Independent.

The President's Office feels the threat from NABU and SAPO and will likely attack the two institutions in response to Chernyshov's notice of suspicion, rather than "saving" the minister, Shcherban added.

"I am sure we will see both attempts to make harmful changes to the law and personal attacks on the SAPO head (Oleksandr Klymenko)," she said.  

Deputy PM Chernyshov returns to Ukraine as questions mount amid corruption probe

Deputy Prime Minister Oleksii Chernyshov returned to Ukraine on June 22 following his official trip abroad amid media speculations connecting Chernyshov’s absence to an ongoing corruption investigation.

The Kyiv IndependentDmytro Basmat

Deputy Prime Minister Oleksii Chernyshov returned to Ukraine on June 22 following his official trip abroad amid media speculations connecting Chernyshov's absence to an ongoing corruption investigation.

Chernyshov, who announced his return in a Facebook post, has been the subject of controversy in recent days after law enforcement agencies unveiled a corruption scheme involving two officials from the now-dissolved Communities and Territories Development Ministry, which was headed by Chernyshov.

Suspicions about Chernyshov, who heads the new National Unity Ministry focused on relations with refugees and the Ukrainian diaspora, arose when the deputy prime minister did not attend a Kyiv forum he himself organized in person but joined online from abroad.

Chernyshov unexpected work trip to Vienna, announced on June 16, came just three days after law enforcement officials revealed the scheme, leaving Prime Minister Denys Shmyhal to answer questions in parliament about Chernyshov's trip. The National Unity Ministry said that foreign trips are a regular part of Chernyshov's work.

Ukrainska Pravda reported, citing its sources, that Chernyshov's son and wife had also Ukraine following Chernyshov's most recent trip. It was not immediately clear whether they had returned to the country.

"Finally home. A difficult but very important business trip (which, thanks to some media outlets, became unexpectedly popular) is now over," Chernyshov said in a Facebook post.

Chernyshov added that he will be returning to work within the Cabinet of Ministers starting on June 23.

"We’ll also break down the smear campaign fact by fact. The truth always prevails," he added, referring to the ongoing police matter.

According to Ukrainska Pravda, Chernyshov and two of his associates came under investigation last year over suspicions that they received kickbacks from Serhii Kopystira, the head of the KSM Group, for illicitly transferring a plot of land for real estate development between 2021 and 2022.

Four sources in anti-corruption agencies told Ukrainska Pravda that despite the investigation, no police searches were conducted at the time, as they were blocked by the head of the National Anti-Corruption Bureau, Semen Kryvonos, who has a long-standing relationship with Chernyshov.

After the dissolution of the Communities and Territories Development Ministry at the end of 2022, Chernyshov was appointed the head of the state-owned energy company Naftogaz. In 2024, the official was tasked with leading the new National Unity Ministry — a position that often involved travel abroad — while also being named deputy prime minister.

The other two people connected to the case — Maksym Horbatiuk and Vasyl Volodin — were reportedly detained last week as the investigation began moving forward.

President Volodymyr Zelensky previously commented on Chernyshov's presence abroad amid questions from media.

"What Shmyhal told me is that he’s on a business trip. He had two tasks from me, from the government, from all of us: the first — to open hubs in different countries, and the second — multiple citizenship. As far as I understand, he is working on both of these," Zelensky was quoted as saying.

The Kyiv Independent could not verify all the claims presented through the media investigation.

Ukraine war latest: ‘Ukrainian drones for the foot of every Russian soldier’ — Zelensky responds to Putin’s threat to conquer all of Ukraine

Key developments on June 21-22: * ‘Ukrainian drones for the foot of every Russian soldier’ — Zelensky responds to Putin’s threat to conquer all of Ukraine. * 3 killed, 14 wounded as Russia strikes Ukrainian military training facility. * Russia seeks to advance along almost entire eastern front, Ukraine holding ground in Kursk Oblast,

The Kyiv IndependentSonya Bandouil

Deputy Prime Minister Oleksii Chernyshov's official trip abroad has been approved until the end of the week, Prime Minister Denys Shmyhal said on June 20 amid media speculations connecting Chernyshov's absence to an ongoing corruption investigation.

Shmyhal made the comment in response to opposition lawmaker Iryna Herashchenko in parliament.

Suspicions about Chernyshov, who heads the new National Unity Ministry focused on relations with refugees and the Ukrainian diaspora, arose earlier this week when the deputy prime minister did not attend a Kyiv forum he himself organized in person but joined online from abroad.

The deputy prime minister's unexpected work trip to Vienna, announced on June 16, came three days after law enforcement agencies unveiled a corruption scheme involving two officials from the now-dissolved Communities and Territories Development Ministry, which was headed by Chernyshov.

According to Ukrainska Pravda, Chernyshov and two of his associates came under investigation last year over suspicions that they received kickbacks from Serhii Kopystira, the head of the KSM Group, for illicitly transferring a plot of land for real estate development between 2021 and 2022.

Four sources in anti-corruption agencies told Ukrainska Pravda that despite the investigation, no police searches were conducted at the time, as they were blocked by the head of the National Anti-Corruption Bureau, Semen Kryvonos, who has a long-standing relationship with Chernyshov.

After the dissolution of the Communities and Territories Development Ministry at the end of 2022, Chernyshov was appointed the head of the state-owned energy company Naftogaz. In 2024, the official was tasked with leading the new National Unity Ministry — a position that often involved travel abroad — while also being named deputy prime minister.

The other two people connected to the case — Maksym Horbatiuk and Vasyl Volodin — were reportedly detained last week as the investigation began moving forward.

Chernyshov traveled to Prague on June 10 and 11 for a business trip, and then to Vienna a week later. The subsequent court hearings with the two detainees detailed Chernyshov's role in the corruption scheme, according to Ukrainska Pravda.

The news outlet stressed that there is currently no evidence that Chernyshov's current stay abroad is connected to the investigation. The National Unity Ministry said that foreign trips are a regular part of Chernyshov's work.

The Kyiv Independent could not verify all the claims and has reached out to Chernyshov's team for comment.

Trump’s peace push falters in both Ukraine and the Middle East — for similar reasons

U.S. President Donald Trump addressed a wide range of subjects during his inauguration speech. When speaking about international relations, he was adamant — “Our power will stop all wars and bring a new spirit of unity,” he said, talking about Russia’s war against Ukraine and the fighting in the Middle

The Kyiv IndependentOleg Sukhov

Coda’s ZEG storytelling festival in Tbilisi has come to an end, and I am both overloaded with information and exhausted by drinking too much wine. My take-home message was that oligarchy is spreading ever wider, and that we need to take its threat to democracy far more seriously than anyone is doing at the moment.

I shared a stage with Ed Caesar, author and journalist from The New Yorker- magazine, who has written some great pieces on oligarchs (as well as much else), with Paul Caruana Galizia, who made this excellent podcast on Londongrad, and with Hans Gutbrod, whose piece on Georgia’s own Bidzina Ivanishvili is very much worth reading. And if you like surreal, ethereal documentaries, I highly recommend Salome Jashi’s ‘Taming the Garden’, which tackles oligarchy and its implications through the story of Georgian trees. 

The joy of the festival is in the incidental meetings, of which few were more joyful for me than sitting next to Joseph Stiglitz at dinner and getting to hear his views on inequality, oligarchy, and the age of Trump. Where else would I ever get to do that? 

Moral of the story: you too should find time to come to Tbilisi next year for ZEG. If you do, you can also make a side-trip to the market to stock up on one of the world’s best condiments.

SHOW US THE MONEY

Victoria Cleland, the Bank of England’s Chief Cashier, has announced that worried Brits are hoarding cash. “At a time of uncertainty, at a time of crisis people do move to cash. They want to make sure they have literally got something under the mattress,” she said at a conference in London.

This, she said, helps to explain why the value of all the banknotes in circulation keeps going up – indeed, it hit a new all-time high of 85.872 billion pounds this year – despite the fact that people use less cash all the time. The Bank of England has previously estimated that between 20 and 24 percent of banknotes at any one time are being used in transactions, and the rest are unaccounted for (or, according to Cleland, hoarded). 

So, if we do the sums and we accept Cleland’s logic, we can say that around 1,000 pounds worth of banknotes is being hoarded by every single person in the UK, up from around 920 pounds last year. I have to say that, with all due respect to Cleland, I am very dubious about that figure, not least because someone is getting a double share to make up for the fact that I don’t have even a fraction of that.

The most recent survey I can find, which is from 2022, suggests I am not alone. The average Brit had just 113.82 pounds at home back then, and it’s hard to see why that total would have increased ninefold in the last three years.

This is not a UK-specific situation. The last survey conducted for the Federal Reserve shows that the average American had $373 either in their wallet or at home in 2024, down $70 from the year before. So cash hoarding in the US is going down, but the value of banknotes in circulation keeps going up –  indeed, it hit a new all-time high of $2.835 trillion in the most recent data release, which is around $7,000 for every person in the United States. So either Brits and Americans alike are spectacularly under-reporting how much cash they’re keeping at home, or someone else is using all that cash for something else.

Considering that barely a week goes by without news of major money laundering gangs being busted with bags full of banknotes, I personally would like it if central bank officials put a little bit of thought into asking whether the extremely healthy demand for their products is not in fact coming from organised criminals. And if it is, whether central banks ought to do something about that.

Five years ago, the House of Commons’ Public Accounts Committee scolded the Bank of England for not caring about where its banknotes go. “The Bank needs to get a better handle on the national currency it controls,” its chair, MP Meg Hillier, said. It still does.

TRACKING ‘ENDANGERED’ MILLIONAIRES

Regular readers will know how much I admire the ability of Henley & Partners, the world’s foremost passport vendor, to turn almost any piece of news into an advertisement for buying a new passport and/or visa.

In recent times, the alarm is being sounded by changes to British tax policy which, basically, make it more expensive for very rich people to live and to die in the UK. And Henley responded in the way that it always does – “provisional estimates for 2024 are even more concerning, with a massive net outflow of 9,500 millionaires projected for this year alone,” it reported last year about the “wealth exodus”. All was not lost, however. If only the UK would scrap taxes on capital gains and inheritance and privatise its healthcare system, millionaires might be persuaded to stay.

The ‘research’ was picked up very widely, with few media outlets questioning its methodology, its publisher’s motivations, how representative its purported database of 150,000 people was of the millions of millionaires in the world, or indeed how exactly anyone knows where they’re all going. The Tax Justice Network has now delved into the report, and its findings are worth a read, not least the headline conclusion that there was no exodus. The correct policy response, it argues, would therefore not be tax cuts at all but higher taxes on wealth.

So, what should we think? Are millionaires leaving the sinking ship, or are they clinging on to help rebuild? Should we lower taxes or raise them? The obvious solution is surely to use satellite tags so millionaires can be tracked like wildebeest as they migrate from the watering holes of Chamonix to the rich, grazing pastures of Mayfair via the rutting grounds of St Barts. Only then can we know for sure if they’re being chased into extinction.

CALLING OUT MONACO

The European Union’s regularly updated “list of high-risk jurisdictions presenting strategic deficiencies in their national anti-money laundering and countering the financing of terrorism (AML/CFT) regimes” has done something worthwhile for the first time I can remember by singling out Monaco.

Normally, the list is made up of a random selection of irrelevant places and third-order tax havens. And there’s plenty of the usual on display: why anyone would worry that Côte d'Ivoire, Namibia and Nepal, for example, are supposedly big centres for financial crime, I have no idea. And normally, the list will avoid pointing a finger at any country that is closely allied or aligned with any EU member, which means the U.S. and U.K. never get singled out even though they’re clearly far more problematic than, say, Algeria.

This time, however, the list does single out Monaco. The principality is a major problem, with deep ties to deeply unsavoury people and a fast-developing financial scandal.

A version of this story was published in this week’s Oligarchy newsletter. Sign up here.

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There are two options for criminals in a democracy who don’t want to go to jail. The first is to launch a large-scale campaign to legalise whatever crime it is that you want to commit. This is hard, slow, laborious and, in most cases, impossible. The second is to not get caught. This is not necessarily easy either, but it’s a lot easier when law enforcement agencies are small, embattled and under-funded.

The 300,000 or so financial institutions subject to regulations in the United States have to report any suspicions they have about transactions, as well as reports of large cash payments, to the Financial Crimes Enforcement Network, or FinCEN. The idea is that their reports will alert investigators to crimes while they’re going on, and help the goodies catch the baddies.

DEFUNDING THE COPS

Sadly, however, FinCEN’s computer system is so clunky it’s like, as a former prosecutor once said, trying to plug AI into a Betamax. Investigators often have to create their own programmes to trawl a database that gains more than 25 million entries every year, or else just pick through them in the hope of finding something interesting. It effectively means that this vast and priceless resource is hardly ever used.

And now FinCEN’s budget looks like it will be slashed even further. “The pittance allocated to FinCEN in the current budget has been reduced even further,” wrote compliance expert Jim Richards, with a link to the 1,200-page supplement to the White House’s proposed 2026 budget with details about the cut. The reduction would take spending back to 2023 levels, which is worrying for anyone keen on seeing criminals stopped. And that’s even before you take into account the effect of workforce disillusionment at regulators such as the Securities and Exchange Commission, resulting from the cuts imposed by DOGE.

“I experienced some dark times during my SEC career, including the 2008-09 financial crisis and the Enron and Madoff scandals,” wrote Martin Kimel in a passionate column in Barron’s. “ But morale at the Commission is the worst I have ever seen, by far. No job is secure. Nobody knows what will become of the agency or its independence.” So, he added, “when the SEC offered early retirement and an incentive payment for people to voluntarily resign, I and hundreds of others reluctantly accepted.”

If you lose experienced personnel, and you lack the resources to invest in the latest technology, you will always lose ground against entrepreneurial and skilled financial criminals. That is the inevitable consequence of what is happening in the United States, which will be devastating for the victims of fraudsters, crooks, hackers and more.

THE UK PRECEDENT

There is, however, a cycle to this kind of thing. Governments that are determined to unleash the private sector always cut enforcement of regulations, but then they become embarrassed by the inevitable revelations of corruption, sleaze and incompetence that result. This is what happened in Britain, where years of news headlines about London being the favourite playground of oligarchs finally led to government action.

Three years ago, the British authorities imposed a special levy on financial institutions to fund the bodies that fight crime, and last month it published a report on the first year of spending. More than 40 million pounds has been invested in new technology to tackle Suspicious Activity Reports (so no more Betamax in London), and almost 400 people have been hired to do the work, including some of them finally beginning to try to drain the swamp that is the U.K.’s corporate registry. This is good news. 

It is inevitable that, just like in the U.K., the United States will eventually become so appalled by the rampant criminality that will result from the cuts to FinCEN, the SEC and other bodies, that politicians will start building a decent system to stop it. I just wish everyone would get on with it, so millions of people don’t have to lose out first.

THE EU GETS INTO GEAR?

You can accuse the European Union of many things, but you can’t say that it acts hastily. Several months after the last progress update from the Anti-Money-Laundering Agency (AMLA), it has appointed its four permanent board members. They represent an interesting cross-section of European expertise. 

There’s Simonas Krėpšta who, at the Bank of Lithuania, has overseen the country’s booming fintech sector and, therefore, has a good insight into the country’s booming money laundering sector, which has seen quite a lot of firms get fined, including arguably Europe’s most valuable startup Revolut. 

Then there’s Derville Rowland of the Central Bank of Ireland, who will bring inside knowledge of Europe’s most aggressive tax haven. And Rikke-Louise Ørum Petersen, who joined Denmark’s Financial Supervisory Authority in 2015, just when the money laundering spree by Danske Bank was about to explode into public view. Finally, there’s Juan Manuel Vega Serrano, who was previously head of the Financial Action Task Force, which gives him plenty of experience of working at an ineffective, slow-moving, superficially apolitical, supranational anti-money laundering organisation. 

All told, I’d say this is a pretty perfect group of people for the job. The European Union works slowly, but it works thoroughly. Of course, AMLA won’t actually be doing anything until 2028, and it probably won’t do much after that either. But you can’t have everything.

A version of this story was published in this week’s Oligarchy newsletter. Sign up here.

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The Corporate Transparency Act was passed by Congress at the very end of Donald Trump’s first term, with bipartisan support and an important mission to protect national security, expose wrongdoing and complicate the committing of financial crime by forcing companies to declare the names of their owners. 

This was at the time not a controversial piece of legislation, not least because American politicians – as part of the Financial Action Task Force – have been pressuring other countries to pass similar laws since the late twentieth century. But it has proved messy to implement. FinCEN, the United States’ financial crimes enforcement network, only finished making the necessary rules to file what it calls “beneficial ownership information” last year – just in time for judges in Alabama and Texas to declare them illegal, and then for the second Trump administration to basically ditch them altogether by saying they don’t apply to 99.9 percent of corporations that are registered in the U.S.

The consultation period over this decision to ditch the filing requirement is now over. (So, if you feel strongly but didn’t get round to writing in, I’m sorry to say you’ve missed your chance.) It is now possible to browse through the several-dozen submissions from concerned citizens and organisations, which is an enlightening experience.

MAKING COMPANIES OPAQUE AGAIN

In the pro-rules camp, you can find comments from law enforcement agencies, anti-corruption organisations, environmental campaigners, credit unions and others who are concerned that the Trump administration’s decision to maintain the previous lax standards is damaging and unwise.

“Without this data,” stated the National District Attorneys’ Association, in a fairly typical submission, “prosecutors are left blind when investigating shell companies used by fentanyl and human traffickers, cybercriminals, and corrupt foreign actors.” These, they added, “are not abstract concerns –these are real threats to American families and communities.”

In the other camp are the small business owners, or associations representing them, who are delighted that the requirements to file their details with FinCEN are now history, and want all beneficial ownership information already filed to be deleted. 

“For many of us, the original BOI requirements felt like an unfair assumption of guilt, treating hard working entrepreneurs as potential criminals rather than the backbone of our economy,” wrote Stephen McKissen, the owner of a video production company in Denver, Colorado. Removing the requirement, he argued, “for US companies and US persons to report BOI lifts a significant weight off our shoulders.” 

Ever since the world’s first piece of anti-money laundering legislation was passed in 1970, businesses have complained about the compliance burdens it imposed upon them. Criminals hide by pretending to be legitimate businesspeople, and the only way they can be exposed is by imposing rules on everyone, thus obliging honest folk to undergo paperwork and inconvenience, which is not popular with the honest folk (or, I suppose, the dishonest ones).

It's crucial to the way the legislation is implemented therefore to minimise that inconvenience, to make sure it does not cause so much irritation that it becomes a political issue. This appears to be where the U.S. efforts ran aground. I had a look at the FinCEN portal through which company ownership is registered and which the small businesses were complaining about. It didn’t look too bad to me, but if the registration process is anything like the comment-reading process, I can see why people are annoyed about having to do it.

Every single comment on the proposed rule changes has the same headline, so it’s impossible to tell which are interesting and which are utterly banal, without opening a new page, then opening a new attachment. When you return to the main page, the list of them rearranges itself unexpectedly, so it’s hard to know which ones you’ve already read. It is in short a very poorly designed piece of software, and you’d think a country that created Google, Apple, Facebook and the rest might have been able to find some better programmers.

Back, though, to America’s notoriously lax shell company legislation. It is the result of it being devolved to state level, so that some states – Delaware and Nevada are stand-out examples – end up competing with each other to attract more incorporation, thus sparking a race to the bottom. 

Perhaps there’s nothing that could have been done to make American business owners appreciate the need to file information about beneficial ownership, but the lesson for bureaucrats is that you have to make compliance easy. Having to file information at both state and federal level was never going to be popular, particularly if the web portal involved was also clunky and annoying. 

However, what’s left of the Corporate Transparency Act will nicely align with the White House’s wider agenda, since it now only applies to foreign companies that have registered to do business in the United States. If criminals currently using offshore-incorporated corporations want to avoid having to report their identity to the authorities, they’ll now need to set up a domestic shell company, which will I suppose be a small win for USA Inc.  

It’s too early to say whether Trump’s tariffs and threats will bring businesses and manufacturing back to America, but he is at least making onshore shell companies great again.

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Since Donald Trump returned to the White House in January, some 31 percent of “revenue agents” (the people tasked with conducting tax audits) have lost their jobs. This is supposed to save the government money, but it’s a bit like trying to reduce the cost of crime by sacking police officers. 

“This administration is clearly running the risk of losing hundreds of billions of dollars -- in fact, likely over $1 trillion -- through its destruction of the IRS. “At a time when deficits are high and rising, that seems a baffling policy choice,” said Larry Summers, noted economist, former treasury secretary, and former president of Harvard University.

The policy is indeed baffling if its aim is to collect taxes; it’s not baffling at all, though, if the intention is to help rich people dodge them.

An early announcement from Trump’s Department of Justice was to pause enforcement of the Foreign Corrupt Practices Act, which has been central to global efforts against bribery since the 1970s. Trump has long argued that prosecuting American businesses for bribing foreign officials makes it harder for U.S. companies to compete. A new DoJ memo shows that it has now thought about what it wants to do, and how to do it in a way that prioritises American interests.

There have long been suspicions that U.S. authorities reserve their biggest fines for non-US companies (a French bank getting fined almost $9 billion, for example), and suggesting that prosecutions will be “America first” is unlikely to help with that perception. “Enforcement of the Foreign Corrupt Practices Act ("FCPA") will now be focused on conduct that harms U.S. interests and affects the competitiveness of U.S. businesses, further suggesting that future FCPA enforcement will be focused on non-U.S. companies,” noted lawyers from White&Case in this assessment.

There is already widespread global concern that the Trump administration will exploit the U.S. dollar’s dominant position in finance to force foreigners to do what it wants. Suggestions that corruption laws are not equally enforced will only further that suspicion. The fewer foreigners who rely on dollars, the less impact US sanctions will have, so it would be good if officials would consider that before implementing their policies.

MINDING THE TAX GAP

Readers old enough to remember the financial crisis of 2007-8 will also remember the wave of popular anger against tax-dodgers that followed it. American prosecutors investigated Swiss banks (good times!); protesters occupied branches of Starbucks (fun!); almost all countries agreed to exchange information with each other about their citizens’ tax affairs to uncover cheats (massive!).

According to the EU Tax Observatory, this information exchange has been a triumph, and cut wealthy people’s misuse of offshore trickery by two-thirds. I have always been a little suspicious of these declarations of victory, however, despite them coming from such a good source, and find grounds for my doubts in this new report from the UK’s National Audit Office.

British tax authorities every year estimate a tax gap – the difference between what the country’s exchequer should receive, and what it actually gets – and politicians regularly talk about reducing it. If the Trump administration seems uninterested in clamping down on tax evasion, and financial chicanery in general, the British government has pledged additional resources for technology and investigators to try to understand what’s happening and whether its tax gap estimate is close to being accurate, so we may learn more about this in future years. Fingers crossed.  

But the NAO report suggests that the way it’s calculated may be a bit questionable. According to the standard estimate, wealthy individuals pay around 1.9 billion pounds less than they should. But, according to a different estimate (“compliance yield”), the tax authorities have successfully brought in an extra 3 billion pounds from wealthy people that would not have been collected without their efforts.

It is a little hard to understand how it is possible to increase tax compliance by 1.1 billion more pounds than the entire deficit that wealthy people are supposedly underpaying. It’s like losing two pounds down the back of an armchair, reaching beneath the cushion and finding three. Except with billions. Something else is very definitely going on. “The large increase in compliance yield raises the possibility that underlying levels of non-compliance among the wealthy population were much greater than previously thought,” notes the NAO.

I am, I admit, someone who fixates on offshore skulduggery, but I can’t help noticing the report states that a mere five percent of the UK tax authorities’ investigative efforts were looking into “offshore non-compliance”. Tax advisers are clever, well-paid people, and they’ll know very well about the best places to hide their clients’ money, and there’s even a suggestion for them in the report: if your client holds wealth in properties abroad, or owns shares in her own name rather than through an institution, her home government will never know about her income she earns from them. Happy days.

A POSTER CITY FOR ILLICIT FINANCE

And speaking of offshore skullduggery. The city of Mariupol has long been central to the war in Ukraine. Enveloped early by Russian forces, its defenders held out for months in an epic battle in the ruins of the Azovstal steel plant, before surrendering in May 2022. Moscow has since made it the poster city for the supposedly prosperous future available in a Russia-ruled Ukraine, but a new report makes clear how hollow such claims are.

“Powerful Moscow-based networks are controlling much of the reconstruction programme. Well-connected companies are benefiting from Russian spending that involves the widespread use of illicit finance and corrupt practices,” note its authors, David Lewis and Olivia Allison. They have specific policy recommendations, of which I think the most important ones relate to my old bugbear of sanctions, which should be better targeted and more strategically deployed. Russia’s crimes in Ukraine include the looting and economic exploitation of cities like Mariupol. 

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