Saturday , 24 February 2018

Ukraine introduced a draft law on the turnover of cryptocurrencies

The Verkhovna Rada of Ukraine, in order to regulate legal relations in the sphere of turnover, storage, use and conduct of operations with cryptocurrencies in Ukraine, presented a draft law on the legalization of cryptocurrencies.

The authors of the bill were three people’s deputies from the People’s Front fraction: Irina Efremova, Irina Voitsekhovska and Igor Kotvitskiy, as well as an elected candidate from the presidential block, Ivan Rybak.

According to legislators, the definition of the concept of cryptocurrency is as follows:

“Cryptocurrency is a program code that is subject to the right of ownership and the subject of the barter contract, information about which is being deposited and stored in the blockchain system.”

From this it follows that the cryptocurrency is not a legal tender, but can only be the subject of a barter agreement. In accordance with the bill, regulation of turnover of cryptocurrency is entrusted to the NBU. The adviser to the head of the State Agency for Electronic Control Konstantin Yarmolenko does not agree with this, he considers this a serious mistake, because the National Bank earlier unequivocally stated that the cryptocurrency is not a currency, and therefore is outside its competence.

In addition, people’s representatives believe that the state needs to know the identity of everyone who conducts cryptocurrency operations on the territory of Ukraine and have data on these operations. Also, the state considers the cryptocurrency as an object of taxation, to which the general rules applicable to the right of ownership will apply.

The draft law notes that violation of the provisions of this law may entail not only civil, administrative, but also criminal liability. Traditionally, the deputies stressed that the cryptocurrency can not be used for calls to overthrow the constitutional order and violate the territorial integrity of Ukraine.

The state intends to fully control the industry and tax it, but is not ready to guarantee anything to its participants. People’s deputies wrote about this in Article 4.

“The state does not guarantee and does not take any measures to ensure the activities of online services for the exchange of cryptocurrency.”

Also, the state does not have obligations and does not compensate for losses in case of devaluation of the currency or losses for any reasons.

In accordance with the bill, the NBU will have to work on the development of the procedure for the creation and operation of cryptocurrency exchanges, and the Cabinet of Ministers must ensure that regulatory and legal acts are brought into line with this law.

This draft law on the regulation of cryptocurrency is the first in the post-Soviet space and one of the first in the world.

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