Thursday , 22 March 2018

Ukraine will regulate Bitcoin

Senior officials in Ukraine are forming a new working group on cryptocurrency regulation, the country’s government announced on Thursday.

A statement released by Ukraine’s security council yesterday reveals a prolonged discussion on the advent of cryptocurrencies in Ukraine during a meeting centered on matters related to the security and defense of the state. Participants of the meeting, which included National Security and Defense Council Secretary Oleksandr Turchynov, specifically ‘considered a complex of problems related to the uncontrolled circulation of cryptocurrencies’ in Ukraine.

Those risks have resulted in the working group’s creation. The group will develop legally compatible proposals to regulate cryptocurrencies, have broader oversight into the cryptocurrency market, monitor transactions ‘with the use of “cryptography’ and identify participants in cryptocurrency transactions. In addition, the working group will also work taxing adopters gaining income in cryptocurrency payments.

The government statement goes on to read:

“Moreover, the authorities were assigned to develop a mechanism for ensuring access of law enforcement bodies to the data of cryptocurrency exchanges with the obligation of the given subjects to store information about all transactions within the period established by law for financial institutions and disclosure of customer information on a motivated request.”

The working group will specifically comprise of representatives from National Bank of Ukraine, the Ministry of Finance of Ukraine, the National Securities and Stock Market Commission of Ukraine, the SSU, the National Police of Ukraine, the State Financial Monitoring Service of Ukraine, the State Fiscal Service of Ukraine and the State Service for Special Communications and Information Protection of Ukraine.

The statement added:

“The development and implementation of all these measures will also include boosting international cooperation to establish a comprehensive regulation of the cryptocurrencies circulation and to avoid the criminalization of this segment.”

Curiously, the statement also hinted at the development of a state cryptocurrency.

It read:

“The National Bank of Ukraine is considering the relevance of establishing its own cryptocurrency.”

Ukraine’s central bank has already confirmed its intention to establish a definitive regulatory framework for cryptocurrencies in the country, a move that would “develop a common position on the legal status of Bitcoin and its regulation,” read a notice from the central bank in mid-2017.

The proposed legislation contained provisions focused on the taxation and oversight of cryptocurrency exchanges and even included a provision regarding domestic mining operations. However, the legislation has not yet been passed into law, and there is no timeline set for its passage.

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