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According to a release from Ukraine’s Ministry of Digital Transformation, President Zelenskyy signed off on a law legalizing the country’s crypto sector.
Overseeing the New Regulation
In view of the crypto donations pouring into the nation late, Ukraine’s “On Virtual Assets” law could not have come at a more opportune time. The nation has received about 100 million USD worth of cryptocurrency since Russia’s invasion in February.
The newly signed bill elevates crypto to a legal asset class while endorsing an official structure to oversee crypto services. Ukraine’s National Commission on Securities and the Stock Market will function in a regulatory capacity within the crypto market.
Alongside standard supervision, the regulatory body will be responsible for outlining and enforcing state policy regarding cryptocurrencies. Additionally, the commission will handle the task of issuing permits to crypto service providers and setting up a system for its distribution.
In keeping with their charge, the law also requires the commission to maintain a list of crypto-based platforms. A comprehensive list would help with easier licensing and implementation of regulatory measures. Ukraine’s national bank will assist in regulation while commercial banks will be open to crypto firms looking to create accounts.
Ukraine has legalized the crypto sector — @ZelenskyyUa signed a law. From now on foreign and Ukrainian cryptocurrencies exchanges will operate legally and banks will open accounts for crypto companies. It is an important step towards the development of the VA market in Ukraine. pic.twitter.com/lqqO1J9r1k
— Міністерство цифрової трансформації України (@mintsyfra) March 16, 2022
In addition to redefining Ukraine’s crypto market, the virtual assets law will play a significant role in its management. According to the ministry of digital information, the law essentially “determines the legal status, classification, and ownership of virtual assets.”
The ministry also noted in its statement that with the new law firmly in place, Ukraine had taken a significant step towards bringing the crypto space within its borders “out of the shadows.”
At the moment, the Ministry of Finance is hard at work on alterations to Ukraine’s tax and civil codes. It hopes the adjustments will accommodate the launch of its digital asset market and embrace of the crypto space.
Crypto Developments Fast-tracked By War
Ukraine’s legitimization of its crypto industry does not denote prior unlawfulness. For some time the country was in the lead regarding crypto adoption. However, over the past year, illicit activities with a direct tie to cryptocurrencies caused the Ukrainian government to clamp down on the crypto space. Since then, virtual goods were only exchanged beneath legal technicalities.
Russia’s conflict with Ukraine has sent ripples through various aspects of the crypto industry. Some developments like Ukraine’s new law have been positive. Biden’s recent authorization of a similar law is another such example, however, there have been several less optimistic responses as well. However, the new regulation could be the start of pro-crypto developments in east-European Ukraine.
The nation recently shared plans for NFT collection centered around the war. According to Ukraine’s crypto-enthusiastic Deputy Minister for Digital Transformation, Alex Bornyakov, the collection will be “like a museum of the Russian-Ukrainian war”. The collection is being launched in support of Ukraine’s defensive efforts against Russia.