The Ukrainian Parliament, the Verkhovna Rada, has adopted a virtual asset legislation regulating foreign and domestic cryptocurrency exchanges operating from within the country.
Yesterday, the Ukrainian Parliament adopted the draft law “On Virtual Assets,” Bill No. 3637, which legally recognizes cryptocurrency in the country for the first time and gives Ukraine the ability to legally regulate digital currency.
According to the bill draft, “This Law regulates legal relations arising in connection with the turnover of virtual assets in Ukraine, defines the rights and obligations of participants in the virtual assets market, the principles of state policy in the field of virtual assets.”
The legislation is based on the existing standards developed by the intergovernmental policy-making organization, Financial Action Task Force on Money Laundering (FATF). The Ukraine’s Ministry of Digital Transformation will be tasked with overseeing the implementation of the new virtual asset regulation and guiding the industry’s growth, in adherence with “international standards.”
What they are saying
Anastasia Bratko of the Ministry of Digital Transformation said the law allows companies to launch virtual asset markets in Ukraine and enables banks to “open accounts for crypto companies.” She stated, “Ukrainians will also be able to declare their income in virtual assets. The law guarantees judicial protection of the rights to virtual asset owners.”
An announcement from the ministry emphasized that “the country will receive additional tax revenues to the budget, which will be paid by crypto companies.” The announcement further stated, “The adopted norms establish rules for service providers related to the circulation of virtual assets and contribute to the market’s de-shadowing.”
Virtual asset service providers (VASPs) “must have an impeccable business reputation” and will be required to disclose their ownership structure to identify their ultimate beneficial owners. Internal anti-money launder measures must also be maintained by VASPs.
Deputy Minister of Digital Transformation of Ukraine, Oleksander Bornyakov, highlighted provisions contained in the legislation to attract “foreign exchange to the Ukrainian market,” stating, “It will become a powerful incentive for the further development of the crypto-sphere in Ukraine. Banks will open accounts for them and conduct transactions with a new class of assets. I am sure that society, business and the state will benefit from the legalization of the new sector of the economy.”
Despite the passing of the bill, they still can’t be used to pay for goods and services. It does, however, allow for blockchain companies to legalize individual business processes and work directly with the current banking system. Citizens can also freely buy and trade cryptos as things currently stand. The hryvnia remains the only legal currency.