Up to now, cryptocurrencies in Ukraine have existed in a gray area. Citizens were allowed to buy and trade digital currencies, but the exchanges and companies involved were under close observation by law enforcement, with actions that could be defined as “disruptive”. According to the Kyiv Post newspaper, for example, the general attitude regarding virtual currencies was to consider them a “scam”, and companies often saw their equipment confiscated for no reason. Last August the Ukrainian Security Service (SBU) intervened to block a network arbitrarily defined as a “clandestine cryptocurrency exchange” in the capital Kiev, claiming that it was a money laundering system explicitly favored by the anonymity of the transactions. If signed by the president, the law will protect both buyers and platforms from fraud, and will determine Ukraine’s approach to the cryptocurrency market from here on out. The country, in fact, as reported by the Ministry for Digital Transformation in a press release, has in its plans the opening of the cryptocurrency market to companies and investors by 2022, but first of all there will be a need for an adaptation of the tax legislation and the code civil. The bill approved these days is crucial for the transition. For the first time in Ukraine, he defines virtual assets as “intangible assets expressed in the form of electronic data”. It also includes the definition of wallet and private key, terms that have never been used up until now in the country’s legislation.With the new law, citizens will be able to own, trade and sell cryptocurrencies using local or foreign platforms registered in Ukraine. However, it will not be possible to use them as a means of payment for goods or services, a role only provided for the local currency. The law also allows crypto companies to officially operate in Ukraine and pay taxes, subject to registration that provides for an adjustment of transparency and reputation and the payment of a fee of about 3 thousand euros. The regulators at the moment are the Ministry of Digital Transformation along with the National Bank and the Commission for Homeland Security, but a new dedicated authority is expected to be created soon.Cryptocurrencies are very popular in Ukraine, daily exchanges are estimated to be around 37 thousand dollars, and with the legalization the numbers are destined to increase. However, not all platforms are optimistic about the new lightweight. According to Oleg Kurchenko, CEO of the Binaryx exchange, state law could deter rather than incentivize due to over-regulation. Others, more optimistic, hope that the new rules will put an end to unjustified raids by the police, guaranteeing greater peace of mind for those who work in the country.
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