On September 8, the Verkhovna Rada of Ukraine adopted in the second reading and in general the basic bill № 3637 on “On Virtual Assets”, which is to legalize cryptocurrencies in Ukraine and finally settle transactions with them. In particular, it determines the legal status of virtual assets, as well as provides legal protection to users and market participants. For the relevant bill voted 276 people’s deputies.
The law on financial monitoring has been in force in Ukraine since April 2020. Among other things, he introduced an inspection of transactions with cryptocurrencies in the amount of more than 30 thousand UAH, as well as blocking cryptocurrencies and confiscation of cryptocurrency for violations. At the same time, the status of cryptocurrencies and the procedure for transactions with them have not been regulated by law so far – this gap is designed to fill 3637. At the end of last year the bill passed the first reading, in early March 2021 the initiative was supported by the National Bank. reading and in general. And now it has happened.
In Ukraine, the term “cryptocurrency” will not be used in regulations, but it will be one of the types of virtual assets. The law forms the legal field of the virtual assets market (legal status, classification, property rights and other key legal definitions) and adapts the FATF recommendations on financial monitoring of the virtual assets market. The document also defines the market regulator – it will be the Ministry of Finance (in some cases the NBU and the NSSMC) and a list of professional providers of virtual assets and their registration.
After the law comes into force, international companies (read: international exchanges where trades in virtual assets) will be able to legally register blockchain business in Ukraine. Banks will open accounts for crypto companies, Ukrainians will be able to declare their income in virtual assets, and the state will guarantee judicial protection of rights to virtual assets.
Deputy Prime Minister – Minister of Digital Transformation of Ukraine Mykhailo Fedorov on his Telegram page reported, that the daily turnover of virtual assets in Ukraine is about 1 billion UAH and stressed that currently it is all in the “shadow” and not taxed. He also noted that today only a few countries in the world have legalized cryptocurrencies – Germany, Luxembourg, Singapore.
“Legalization of virtual assets will facilitate the active registration of crypto companies in Ukraine. In particular, the adoption of relevant legislation will stimulate the attraction of foreign exchanges to the Ukrainian market, which will be a powerful incentive for further development of the cryptosphere in Ukraine. Banks will open accounts for them and conduct operations with a new asset class. I am confident that society, business and the state will fully benefit from the legalization of a new sector of the economy. “
Deputy Minister of Digital Transformation for IT Development
Bill № 3637 is basic (roughly speaking, it determines the status of cryptocurrencies and allows transactions with them). Now legislators must amend the civil and tax codes, as well as develop the necessary bylaws, which will prescribe specific rules, mechanisms and features of taxation of transactions with cryptocurrencies. Chairman of the Committee on Finance, Tax and Customs Policy Danylo Hetmantseva clarifiedthat they plan to do within a year.
According to Chainalysis, in 2020 Ukraine entered the top 10 countries with the highest earnings on bitcoin and the top 5 ranking of the global index of cryptocurrency use.
In 2020, Ukrainian civil servants declared 46,351 Bitcoin coins.