Ukraine Has Defined the Conception of Cryptocurrency Market Regulation

Published on 23 Jul. 2018

Ukraine has made considerable progress in the direction of cryptocurrency sector regulation. Last Friday, the head of the National Commission on Securities and Stock Market Tymur Khromaiev announced on his Facebook page that the government approved the new conception of the regulation politics concerning cryptocurrencies, i.e., the recognition of the separate categories of cryptocurrencies as the financial instruments. Conception also defines the roles and functions of the state bodies in the regulation of these instruments, in addition to the licensing of the transaction participants, conditions of information disclosure and other factors.

The idea was introduced by the Financial Stability Council - the body that includes officials from the regulatory institutions such as National Bank of Ukraine, Ministry of Finance, National Commission on Financial Services, National Commission on Securities, and Deposit Guarantee Fund.

It’s a prominent first step in the creation of consensus between the state bodies and financial regulators. It confirms the readiness to work with Verkhovna Rada and crypto market to form the legislative and normative base that will ensure transparency and quality of the relations between investors and market members with cryptocurrencies,

- Khromaiev commented.

Cryptocurrencies and blockchain become more and more popular in Ukraine. As we reported earlier, in December last year, Ukraine took the eleventh place in Europe by the number of blockchain projects.

Ukraine has been long looking for the answer on the “cryptocurrency question,” solving multiple problems with unregulated circulation of digital currencies. Decentralized nature of cryptocurrencies, together with their anonymity and lack of regulation, means that they could be used in the potentially illegal operations, which is quite concerning for the Ukrainian police.

From October 2017, three law projects concerning legalization and regulation of the digital asset market have been introduced. However, until the beginning of this year, there has been no progress. The government has created a workgroup that had to work out offers on cryptocurrency regulation. The conception that has received the state support was offered by the Commission on Securities in May. Khromaiev then mentioned that the developing cryptocurrency industry made the crypto market become “an integral part of economic and financial relations,” which required appropriate legal recognition.

Meanwhile, Ukraine tries to become an attractive place for the cryptocurrency miners. Last month, the State Service on Special Communication and Information Protection announced that the institution didn’t plan on any licensing of the cryptocurrency mining. And even earlier, in March, the minister of Economic Development and Trading Stepan Kubiv informed that the government committee approved the decision to complement the KVED (Ukrainian Industry Classification System) with the paragraph on cryptocurrency mining. However, all these efforts are neutralized by the aggressive actions of Ukrainian law enforcement bodies, who usually don’t bother investigating the legitimacy or illegality of mining, and carry out headline-making operations with equipment exclusion.

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