The President of Ukraine has returned the recently passed law “On Virtual Assets” to the country’s Legislative Assembly Varkhovna Radha. The head of state has come up with his own advice and opposes the establishment of a new regulatory body that would require additional funding.
Installing new crypto market regulators would be costly, Zelensky warns
Ukraine’s parliament passed the long-awaited law “On Virtual Property” in early September when lawmakers approved the bill for a second and final reading. The law, designed to regulate crypto-related activities in the country, was first read last December, then amended and re-introduced in Radha in June this year.
In order for the new law to take effect, Kiev authorities will have to amend the tax code and the president will have to sign the virtual assets law. However, Volodymyr Zelensky decided to return it to the Ukrainian deputies and requested some changes.
In addition to introducing the basic legal definition of cryptocurrency, such as “financial virtual assets”, the document also assigns responsibilities among government agencies expected to oversee the circulation of digital assets under the jurisdiction of Ukraine. For example, if the assets are backed by currency, they will be regulated by the National Bank of Ukraine (NBU) and if the underlying asset is a security, the National Securities and Stock Market Commission (NSSMC) will be entrusted with this task.
The law on “virtual assets” also calls for the establishment of a new regulatory body for the crypto market, under executive power. According to Zelensky, “significant expenditures will be required from the state budget,” the Ukrainian presidency explained in a statement that the bill serves its purpose to further amend. The head of state proposed that the NSSMC take over these responsibilities instead.
The newly enacted law recognizes virtual assets as indestructible products and divides them into two main categories: protected and insecure. Cryptocurrencies will not be accepted as a legal means of payment in Ukraine and their direct exchange for other products or services will not be allowed.
The bill introduces a licensing system for crypto service providers which means they will need approval from the Ukrainian Ministry of Digital Transformation and exchange and other digital asset platforms to operate in Eastern European countries. The law does not determine the legal status of mining but does not prohibit it. Upcoming tax amendments will address the accounting practices applicable to various crypto-related activities.
Do you expect Ukrainian lawmakers to accept President Zelensky’s proposal and amend the law on “virtual assets”? Let us know in the comments section below.
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