Rada legalized virtual assets in Ukraine: What will change

Author

Diana Polunina

The Verkhovna Rada adopted in the second reading the bill No. 3637 on virtual assets that is the basis for the launch of the virtual assets market in Ukraine. 276 MPs voted "for" at the meeting on September 8.

As Deputy Prime Minister—Minister of Digital Transformation Mykhailo Fedorov reported in his Telegram channel, the document will regulate the turnover of the virtual assets in the country (daily turnover is 1 billion UAH) that are in the shadows. Because of this, international exchanges cannot enter Ukraine.

«We will create favorable conditions that will allow companies to register in Ukraine, and not abroad. The budget will obtain taxes, and entrepreneurs will feel secure. Only a few countries in the world have legalized crypto assets—Germany, Luxembourg, and Singapore. Ukraine will be one of them.»

Mykhailo Fedorov

Vice Prime Minister, Minister of Digital Transformation

Mykhailo Fedorov

Vice Prime Minister, Minister of Digital Transformation

According to Danylo Hetmantsev, the Head of the parliamentary Committee on Finance, Tax and Customs Policy, the country must amend the Civil Code and the Tax Code, as well as draft appropriate by-laws during the year. According to Fedorov, after adopting the law on amending the Tax Code, it will be possible to launch a legal market of virtual assets in Ukraine.

"The adopted bill is the basic one. Now we are working on a bill to amend the Tax Code. It regulates the issues of taxation of the virtual asset market participants. After its adoption, we will be able to launch the virtual asset market," he wrote on his Facebook page.

The explanatory note to the law states that it will be able to streamline the regulation of the virtual assets market, regulate the legal status of these assets and civil relations between individuals and legal entities that emerge when using digital assets.

The main thing in the law on virtual assets:

the law allows foreign and Ukrainian crypto-exchanges to work officially;
the document states that virtual assets are not a means of payment in Ukraine and cannot be exchanged for property (goods) and work (services);
the Ministry of Digital Transformation will be the virtual assets market regulator, and in some cases the National Bank and the National Commission on Securities will have the powers;
the law is based on the current standards of regulating transactions with virtual assets of the international group Financial Action Task Force on Money Laundering (FATF);
the bill provides for establishing a new regulator—the National Service for Regulating Circulation of Virtual Assets (NSVA) that will issue permits to crypto companies to work in Ukraine.

Context. In the first reading, the Verkhovna Rada adopted the Law "On Virtual Assets" in early December 2020.