Revised ‘On Virtual Assets’ Bill Aims To Regulate Ukraine’s Crypto Space This Summer – Bitcoin News Regulation

The Ukrainian parliament has published an updated version of the bill “On virtual assets”. The revised bill requires exchanges to obtain government clearance, disclose ownership, and implement mandatory KYC procedures. The document has been criticized by Kiev regulators, but the government wants the legislation passed before the summer vacation of parliament.

The bill proposes regulations for cryptocurrencies in Ukraine

Ukrainian lawmakers have revised the bill designed to regulate the country’s sprawling crypto space. MPs have introduced a series of amendments since December, when it was voted on at first reading in the Verkhovna Rada, Ukraine’s parliament. The latest version of the document was released this week by the Parliamentary Committee for Digital Transformation which recommended its adoption.

The bill recognizes a virtual asset as “intangible good“Which has value and is an” object of civil circulation “, Forklog reported. Virtual assets can “certify proprietary or non-proprietary rights,” including “rights to claim other objects of civil rights,” the publication details. The draft also distinguishes between financial instruments and virtual assets backed by currencies.

Revised Bill 'On Virtual Assets' Aims To Regulate Ukraine's Crypto Space This Summer

One of the key regulations concerns cryptocurrency exchanges and exchanges. To operate legally, they must be authorized by the Ministry of Digital Transformation. Crypto service providers will be required to disclose their ownership structure and monitor financial transactions to prevent money laundering. The permits will be valid for one year. Russian platforms will not be able 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 need to provide IDs, bank accounts, and information about their e-wallets. Businesses will also need to share their business registration numbers. Trading platforms that do not currently conduct client verifications will need to update their onboarding procedures to comply with the law.

Revised ‘virtual assets’ bill draws criticism from Ukrainian regulators

The authors of the new legislation have tasked the Ministry of Digital Transformation, the National Securities and Securities Market Commission (NSSMC) and the National Bank of Ukraine (NBU) with the supervision of the implementation of the law. Representatives of the NSSMC and NBU have criticized the draft and called for further revisions in correspondence with the president of the Verkhovna Rada, Dmytro Razumkov.

The central bank has indicated that the bill “On virtual assets” is plagued by “important gaps and conceptual errors” that could generate legal uncertainty. At the same time, the securities commission has complained that the law does not clearly define the responsibilities of each regulator and does not have mechanisms to coordinate regulatory activities in the market.

Revised Bill 'On Virtual Assets' Aims To Regulate Ukraine's Crypto Space This Summer

The NSSMC also insisted that the virtual asset classification adopted and the regulatory approach do not correspond to international best practices and EU legislation. The agency is concerned about the absence of texts dealing with investor protection and crime prevention. The NBU added that 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 national fiat currency in any way. The bank fears that this could lead to the emergence of a parallel settlement system beyond its control. The Rada’s legal department asked for further amendments to the draft.

The Deputy Minister of Digital Transformation, Alexander Bornyakov, acknowledged that the ministry faces criticism from various government agencies who consider the bill as “insufficiently perfect.” However, he noted that the need to protect the interests of the State is often understood as a need to establish additional restrictions and unreasonably complicate the business environment. Bornyakov emphasized that the interests of cryptocurrency market participants would be the top priority of his department and promised that his team would do everything possible to ensure that the bill reaches the Rada floor during its final plenary week ending on 13 of July.

In recent years, Ukraine has become a generally crypto-friendly destination. The country was classified First of more than 150 countries in last year’s edition of the Global Crypto Adoption Index from blockchain forensic firm Chainalysis.

What is your opinion on the proposed encryption legislation in Ukraine? Share your thoughts on the matter in the comment section below.

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