Ukraine’s president has returned the recently adopted “virtual assets” law to the Verkhovna Rada, the country’s legislature. The head of state put forward his own proposals and opposed the creation of a new regulatory body that would require additional funding.
Zelensky warns that creating a new crypto market regulator will be costly
The Verkhovna Rada adopted the long-awaited “Virtual Assets” law in early September when lawmakers approved the law in its second and final reading. The legislation, designed to regulate cryptocurrency-related activities in the country, passed its first reading last December, after which it was reviewed and presented again at the Rada in June of this year.
In order to enforce the new legislation, the authorities in Kiev need to make amendments to the tax code and have the president sign the Virtual Assets Act. However, Volodymyr Zelensky decided to return it to the Ukrainian deputies and asked for some changes.
Besides providing key legal definitions related to cryptocurrencies, such as “financial virtual assets,” the document also outlines responsibilities among government institutions that are expected to oversee the trading of digital assets within Ukrainian jurisdiction. For example, if the assets are backed by currencies, they will be regulated by the National Bank of Ukraine (NBU), and if the underlying asset is a security, then the National Securities and Exchange Commission (NSSMC) will be tasked with this function.
The Virtual Assets Act also provides for the creation of a new regulatory body for the cryptocurrency market, subordinate to the executive branch. In an announcement explaining its motives for requesting further revisions to the bill, the Ukrainian presidency clarified that, according to Zelensky, “it would require significant expenditures from the state budget.” The Head of State suggests that the NSSMC take over these tasks instead.
The newly adopted legislation recognizes virtual assets as intangible goods and divides them into two main categories: secured and unsecured. Cryptocurrencies will not be accepted as legal payment in Ukraine and their direct exchange with other goods or services will not be permitted.
The bill introduces a licensing system for crypto service providers which means that exchanges and other digital asset platforms will need a permit from Ukraine’s Ministry of Digital Transformation to operate in the eastern European country. The legislation does not define the legal status of mining but it also does not prohibit it. The upcoming tax amendments will address the accounting procedures applied to various crypto-related activities.
Do you expect Ukrainian lawmakers to accept President Zelensky’s proposals to amend the law on “virtual assets”? Let us know in the comments section below.
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