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Ukraine Regulates Cryptocurrencies

Ukraine’s parliament, the Verkhovna Rada, has passed the bill “On Virtual Assets” on its second and final reading. The legislation governs cryptocurrency transactions in the Ukrainian jurisdiction. The law was carried by a strong majority of 276 votes out of 376 present MPs, with only six voting against it.

The long-awaited measure will go into effect if lawmakers adopt changes to the country’s tax laws regarding the taxation of bitcoin transactions. According to Forklog’s report on the development, the Ukrainian legislature has yet to decide on these modifications.

The new law’s provisions acknowledge virtual assets as intangible things that can be both secured and unsecured. However, cryptocurrencies are not recognised as legal tender in Ukraine, and their exchange for other products or services will be prohibited.

The law also defines “financial virtual assets,” which must be issued by firms registered in Ukraine. If these assets are backed by currency, they will be regulated by Ukraine’s national bank, the National Bank of Ukraine (NBU). The National Securities and Stock Market Commission (NSSMC) will be the primary regulator if the underlying asset is a securities or a derivative.

Participants in the cryptocurrency market will be able to establish the worth of virtual assets on their own, open bank accounts to settle transactions, and seek judicial protection for associated rights. Service providers, like traditional financial institutions, are obligated to follow the country’s anti-money laundering legislation and to prevent attempts to finance terrorists through their platforms.

Ukrainian authorities have maintained a positive approach toward the country’s booming crypto economy, as revealed by executive power representatives this week.

During a visit to the United States, President Volodymyr Zelensky emphasised the significance of establishing a legitimate digital assets market, which he termed as a “development vector” for the country’s digital economy. Mykhailo Fedorov, Ukraine’s Minister of Digital Transformation, stated that the government is aiming to become an appealing location for crypto firms.

Last December, the Rada voted on first reading of the draught law “On Virtual Assets.” In June of this year, lawmakers released a revised version of the document after making a number of revisions.

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