Cryptocurrency regulation

Crypto Regulations In Ukraine: How is the Government Responding to Cryptocurrencies

Author: Qadir AK

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Qadir Ak is the founder of Coinpedia. He has over a decade of experience writing about technology and has been covering the blockchain and cryptocurrency space since 2010. He has also interviewed a few prominent experts within the cryptocurrency space.

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Ukraine has taken an important step towards the development of the Cryptocurrencies Market, by legalizing the Crypto sector in the country. President Volodymyr Zelensky signed the law on March 16, 2022. Alongside, the President has removed many taxes on virtual assets and made a uniform 2 percent tax on the overall transactions. 

These foreign and Ukraine cryptocurrency exchanges can operate legally and the banks are allowed to open accounts for crypto companies of Ukraine. This law is rewarded as the very first law out of many needed which define digital crypto-assets and their roles in the Ukraine market. Also, helps in structuring the current gray market activities of crypto.

Ukraine Crypto Regulation 2022 

30-04-2022: Ukraine launches website for NFT and Crypto donations. 

According to the website, all NFT proceeds will go to the non-profit Aid for Ukraine. The funds will be used to support humanitarian aid programs in the country. If you are not holding NFT, you can choose to donate crypto on the website too. 

30-04-2022: Elon musk was the first public figure to enter Ukraine NFT museum’s ‘Hall of Fame.

Elon Musk, the world’s richest person, is the first inductee into Ukraine NFT museum’s ‘Hall of Fame. The virtual gallery of NFT-based artworks will feature celebrities and public figures who have supported Ukraine amid the ongoing war with Russia.

25-04-2022: Ukraine has banned residents from buying crypto using the country’s currency.

Ukraine has announced that it is banning residents from buying digital assets using the Ukrainian Hryvnia. Those who want to buy crypto will have to use foreign currencies and even then purchases are going to be limited to 100,000 Ukrainian hryvnia a month which is about $3400 at current rates. 

16-03-2022:  Ukraine officially legalizes Bitcoin and other cryptos after Zelenskyy signs new law. 

Ukrainian president Volodymyr Zelenskyy has enacted a law officially making cryptocurrencies legal in the besieged country. The president signed allowing foreign and Ukrainian crypto exchanges to operate legally in Ukraine.

Government’s Stand on Cryptocurrencies

Ukraine President Volodymyr Zelenskyy has signed a legal framework for the cryptocurrency industry in the country. which allows foreign and Ukrainian virtual currency exchanges to operate legally in the country under the guidelines of the country’s  Ministry of Digital Transformation. 

The ‘Virtual assets law’ of Ukraine determines the cryptocurrency’s legal status and classification and ownership of virtual assets. also, determines financial monitoring measures for virtual assets. 

Ukraine’s National Securities and Stock Market Commission regulates the crypto market. The body regulates the area of Crypto licensing, businesses, and implementation of state policy in the industry. 

Ukraine is now accepting donations towards military defense against Russia in the form of currencies like bitcoin and ether. It has also expanded accepting the number of cryptocurrencies for donations and raised over $63 million now. 

Ukraine has further launched a website for accepting donations from the globe. People can donate via cryptocurrencies which will be utilized for humanitarian and for Ukraine’s military. 

Ukraine Crypto Taxation

Crypto transactions in Ukraine are treated as business activity and any income from these transactions is taxed with 18% of personal income tax and 1.5% of military tax in the country. 

The tax imposed on an individual’s income on crypto transactions is imposed with a 5% personal income tax valid for a period of 5 years. 

Further, the Sale of cryptocurrencies and intermediary services of crypto-related to the creation and circulation of VAs are non-taxable in Ukraine VAT. 

Crypto Mining In Ukraine 

Crypto mining is a legal gray area in Ukraine. Individuals start crypto mining at home earning a few dollars every day, whereas others seeking big profits begin with large-scale warehouses filled with rows of “rgs’ ‘-computers and video game consoles connected together and dedicated to mining cryptocurrency using their processing power. 

Young tech specialists have a great interest in crypto mining with an average earning of $2,300 a month which is far better than the average salary in Ukraine of $600 per month. 

Historical Events and Announcements

09-09-2021: Ukraine is the latest country legalizing bitcoin a sign that governments around the world are realizing that bitcoin is here to stay. Crypto in Ukraine has existed in a legal gray area till today. 

07-04-2021: Ukraine’s Civil servants must have to declare all the property they own or use, even though the country is not regulating digital assets some include crypto in their declarations too. A draft bill establishing the legal status of crypto is still waiting to be passed by the Ukrainian national parliament.

01-02-2021: Ukraine plans a huge cryptocurrency mining data center next to nuclear power plants and host state documents and mine cryptocurrency. Details on cryptocurrency projects are limited. 

22-05-2020: New bill in Ukraine for crypto firms to open Bank accounts. The ministry of Digital Transformation of Ukraine published a crypto draft law on virtual assets in response to FATF’s deadline. 

21-02-2020: Ukrainian government is making a concerted effort to engage in the crypto-adoption race. The National Bank of Ukraine released its much-hyped central bank digital currency project called e-hryvnia. 

11-06-2019: Binance and Ukraine’s digital transformation ministry announces cooperation to implement cryptocurrencies in the country. Both together have signed a memorandum of understanding (MoU) for joint cooperation to establish the legal status of virtual assets and currencies in Ukraine. 

Conclusion

Ukraine is one of the fastest cryptocurrency adopters in the world. Cahinalisis report says that a data firm specialized in decentralized finance structures has made a concerted effort for attracting investments towards the related technology. 

Ukraine’s economy has shrunk by 45% after the Russia-Ukraine war. It is now required for Ukraine’s government to concentrate on more crypto frameworks, as one out of them is currently trending in the country.

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Qadir AK

Qadir Ak is the founder of Coinpedia. He has over a decade of experience writing about technology and has been covering the blockchain and cryptocurrency space since 2010. He has also interviewed a few prominent experts within the cryptocurrency space.

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