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The Ukrainian Parliament issued an updated version of the draft law on “virtual assets”. The revised bill requires exchanges to obtain government authorization, disclose their ownership and implement mandatory KYC procedures. The document was criticized by Kiev’s regulators, but the government hopes to pass legislation before the summer vacation of Parliament.
Ukrainian lawmakers revised the draft law aimed at regulating the country’s expanding crypto space. Since the first reading vote in the Verkhovna Rada of the Ukrainian Parliament last December, the delegates have proposed many amendments. The latest version of the document was released this week by the Parliamentary Digital Transformation Committee and it is recommended to adopt the document.
According to Forklog, the bill treats virtual assets as “intangible assets” that have value and are “private circulation objects.” The publication details that virtual assets can “prove property rights or non-property rights,” including “claiming the rights of other civil rights objects.” The draft also distinguishes between financial instruments and currency-backed virtual assets.
One of the key regulations involves cryptocurrency exchanges and exchanges. To operate legally, they must be authorized by the Digital Transformation Department. Crypto service providers will be obliged to disclose their ownership structure and monitor financial transactions to prevent money laundering. The license is valid for one year. Russian platforms will not be allowed to conduct 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 ID, bank account, and information about their e-wallet. Companies must also share their business registration numbers. Trading platforms that currently do not perform customer verification must update their entry procedures to comply with the law.
The makers of the new legislation have instructed the Ministry of Digital Transformation, the National Securities and Stock Market Committee (NSSMC) and the National Bank of Ukraine (NBU) to monitor the implementation of the law. Representatives of NSSMC and NBU criticized the draft and called for further revisions in a communication with the chairman of the Verkhovna Rada Dmytro Razumkov.
The central bank pointed out that the bill on “virtual assets” is full of “major gaps and conceptual errors” that may cause legal uncertainty. At the same time, the China Securities Regulatory Commission complained that the law did not clearly stipulate the responsibilities of various regulatory agencies, nor did it establish a mechanism to coordinate market regulatory activities.
NSSMC also insisted that the virtual asset classification and supervision methods adopted did not comply with best international practices and EU legislation. The agency is concerned about the lack of a text on investor protection and crime prevention. NBU added that although virtual assets are not recognized as legal tender in Ukraine, the law does not explicitly prohibit them from exchanging goods and services, nor does it in any way restrict transactions with other virtual assets or national legal tender. The bank is concerned that this may lead to a parallel settlement system beyond its control. Lada’s legal department called for more changes to the draft.
Alexander Bornyakov, Deputy Minister of Digital Transformation, admitted that the ministry faced criticism from various government agencies, saying that the bill was “not perfect.” However, he pointed out that the need to protect national interests is usually understood as the need to establish additional restrictions and unreasonably complicate the business environment. Bornyakov emphasized that the interests of crypto market participants will be the top priority of his department and promised that his team will do their best to ensure that the bill is submitted to Rada at the plenary meeting of the last week ending on July 13.
In the past few years, Ukraine has become a generally cryptocurrency-friendly destination. In the global encryption adoption index released by blockchain forensics company Chainalysis last year, the country ranked first among more than 150 countries.
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