The Ukrainian parliament has released an updated version of the draft law On Virtual Assets
On 2 December 2020, Ukraine’s parliament passed the Bill on Virtual Assets No. 3637. This is the proposed law to regulate cryptocurrencies in Ukraine. And now, the Ukrainian parliament has released an updated version of the bill “On Virtual Assets”. This update revised the draft legislation designed to regulate the country’s expanding crypto space.
Revised bill “On Virtual Assets” aims to regulate Ukraine cryptocurrency space this summer
Delegates have introduced several amendments since December when it was voted on during the first reading at the Verkhovna Rada, Ukraine’s parliament. The latest version of the document was released this week by the Digital Transformation Committee.
The revised bill requires exchanges to obtain government permission, disclose their ownership, and perform mandatory KYC procedures. The document has been criticized by regulators in Kyiv but the government wants the law to be passed before the parliamentary summer break.
The law On Virtual Assets stated:
“The bill recognizes a virtual asset as an intangible good that has value and is an object of civil circulation.”
In which, virtual assets can certify property or non-property rights, including rights to claim other objects of civil rights. The draft also distinguishes between financial instruments and virtual assets backed by currencies.
One of the main regulations concerns the exchange and exchange of cryptocurrencies. To operate legally, they will have to be authorized by the Ministry of Digital Transformation. Cryptocurrency service providers will be obligated to disclose their ownership structure and monitor financial transactions to prevent money laundering. The license will be valid for a period of one year. Russian platforms will not be allowed to do business in Ukraine.
Another important aspect is the introduction of mandatory identification and verification procedures. As part of the know-your-customer (KYC) process, individuals will be required to provide their ID, bank account, and e-wallet information. Companies will also have to share their business registration numbers. Trading platforms that do not currently perform customer verification will have to update their accession process to comply with the law.
The central bank has pointed out that:
“The bill On Virtual Assets is riddled with significant gaps and conceptual errors that could create legal uncertainty.”
At the same time, the securities commission has complained that the law does not clearly define the responsibilities of each regulator and has no mechanisms in place to coordinate regulatory activities in the market.
While virtual assets are not recognized as legal tender in Ukraine, the law does not explicitly prohibit their exchange for goods and services and does not limit trading with other virtual assets or the national fiat currency in any way.
Over the past few years, Ukraine has emerged as a generally crypto-friendly destination. According to a recent survey, the cryptocurrency brought Ukrainian investors $400 million in 2020. The country now ranks 10th globally in bitcoin investment gains, according to a report published on June 7 by Chainalysis, a cryptocurrency analyst.
Source: Chainalysis
At the head of a rapidly developing global bitcoin market is the U.S., raking in over $4 billion in profit from bitcoin last year, three times as much as China with its $1.1 billion in bitcoin profits. By investing heavily in the world’s most popular cryptocurrency, bitcoin, investment gains in Ukraine reached the same levels as South Korea, the Netherlands, and Canada —countries with stronger economies and higher gross domestic product rankings.
Read more:
- The Central Bank Of Indonesia Bans Cryptocurrencies As Payment Tool
- Vietnam Officially Researched And Piloted The Use Of Cryptocurrency