Ukraine is approaching securing legal status for cryptocurrencies such as Bitcoin with a new bill.
On May 18, the Ministry of Digital Transformation of the state published a new bill ‘ On Virtual Assets ‘. It aims to determine the legal status of cryptocurrencies and the rules for their distribution and issuance in the country. The current version of the bill is not final and is open for discussion until June 5, 2020.
The crypto industry in Ukraine is still in the ‘ gray zone ‘
According to one of the co-authors of the new bill, the main goal of the initiative is finally to enable local crypto businesses – such as stock exchanges – to open bank accounts.
Michael Chobanyan, president of the Bitcoin Association Ukraine , an organization that co-authored the new bill, along with government agencies, law firms and industry, says cryptocurrencies are not yet able to open bank accounts in Ukraine.
The proposed bill is designed to take cryptocurrency out of the gray area and finally lead to the legal presence of crypto companies in Ukraine. According to the bill, providers of services for virtual assets – crypto exchanges, publishers and consumers – ” have the right to open accounts in banking and other financial institutions .”
Only registered cryptocurrencies will be ‘ legal ‘
However, unlocking enough benefits for the crypto industry in Ukraine has its costs. Earlier this week, Andriy Havryuchenko, founder of software company DevNull.AI, released a publication claiming that Ukraine’s virtual assets bill would make all crypto wallets in Ukraine illegal unless registered with the ministry.
According to the bill, local companies are required to register in order to legally conduct cryptocurrency business in Ukraine.
“If you do it without being on the register, you are essentially breaking the law …,” Chobanyan said.
The executive also pointed out that such companies will have to ensure compliance with anti-money laundering (AML) practices and carry out KYC (get to know your customer).
The crypto law of Ukraine comes in response to the requirements of the FATF for AML
According to Chobanyan, the new bill comes in response to a request from the Financial Action Task Force or FATF. Last year, they announced that they would seek to adopt AML cryptocurrency guidelines by June 2020.
Ukraine has been considering a law regulating cryptocurrencies for at least four years. The first reports on crypto regulations came in late 2015, when the Verkhovna Rada of Ukraine announced plans to determine the legal status of Bitcoin by January 2016. Like Russia, none of the existing cryptocurrency initiatives has been adopted in Ukraine so far.
Local authorities are reportedly working on at least three separate bills, including one on cryptocurrency taxation. At the end of 2019, the Ministry of Digital Transformation of Ukraine partnered with the world’s largest cryptocurrency exchange Binance to cooperate on local crypto legislation. According to Chobanyan, Binance did not participate in the drafting of the bill “On virtual assets”, but is expected to give feedback on the proposed law.