Ukraine’s updated crypto bill kicks one ministry out as regulator

Published at: Feb. 17, 2022

Ukraine’s parliament, the Verkhovna Rada, has approved some significant amendments in the country’s major cryptocurrency-related legislation known as the bill “On Virtual Assets.”

The Ukrainian Rada passed the legislation in the second reading during a plenary session on Thursday, with 272 out of 365 deputies supporting the bill.

The deputies specifically approved several bill recommendations by Ukraine’s President Volodymyr Zelensky, removing the country’s Ministry of Digital Transformation from the list of authorities overseeing the cryptocurrency market.

As such, the updated version of the bill establishes The National Securities and Stock Market Commission of Ukraine, or NSSMC, and the National Bank of Ukraine, or NBU, as two major regulators on the crypto market.

The NBU is specifically assigned to oversee the turnover of virtual assets backed by currency valuables. The NSSMC is set to supervise other types of digital assets, including derivative financial instruments as well as regulate virtual asset service providers.

Alex Bornyakov, deputy minister of Ukraine's Ministry of Digital Transformation, told Cointelegraph that the ministry welcomes the latest changes in the country's crypto law.

"Shrinking regulatory bodies can actually significantly accelerate crypto market launch. In order to ensure the growth of the crypto industry we are ready to cooperate with The National Commission on Securities and Stock Market. Ultimately, real change in any market is driven by collaboration."

According to Konstantin Yarmolenko, head of advisors at parliamentary group Blockchain4Ukraine, Zelensky is expected to sign and publish the law within the next 10 days. Local lawmakers are also expected to register a bill on amendments to Ukraine’s tax code in order to regulate “all issues related to taxation of cryptocurrencies and other virtual assets.”

As previously reported by Cointelegraph, Ukraine’s bill “On Virtual Assets” was introduced back in May 2020, with a mission to determine the legal status of cryptocurrencies like Bitcoin (BTC). After several readings, the Ukrainian president returned the bill to parliament for revision due to the expensiveness of setting up a new regulatory body for digital asset oversight.

Established in August 2019, the Ministry of Digital Transformation is known for collaborating with some of the crypto industry’s most prominent players, including Binance, the world’s largest crypto exchange.

The news comes amid the ongoing tensions between Ukraine and Russia, with reports alleging that Russia was adding troops to the Ukraine border despite claims it would withdraw some forces. Amid the ongoing crisis, Russia is also working hard on crypto regulation, with the government planning to release draft industry regulations on Friday.