The draft law on the regulation of cryptocurrencies in Ukraine has already passed its first reading and is currently undergoing refinement for further consideration. Member of Parliament Yaroslav Zheleznyak has repeatedly emphasized that the text of the document may undergo significant changes before the second reading.
This is reported by Business • Media
Key Stages of Refinement of the Draft Law
Lawyers explain that between the first and second readings, numerous amendments are typically submitted to the draft law—sometimes numbering in the hundreds, which is common for important legislative initiatives. Managing partner of the law firm Winner, Igor Yasko, estimates that changes could affect between 50% and 70% of the text of the draft, especially if discussions continue among various departments.
“In the area of crypto assets, this risk is even higher—due to the novelty of the field, the attempt to align Ukrainian law with the European MiCA, as well as disputes regarding actual control and oversight of the market.”
Which specific provisions may change is still undetermined. As noted by the head of the Committee on Finance, Taxation, and Customs Policy, Danilo Hetmantsev, the initiator of the draft law:
“We do not have any frameworks regarding what we can and cannot change. We will discuss each provision.”
Possible Changes and Expert Proposals
According to Igor Yasko, basic definitions, general principles of regulation, and investor rights protection usually remain unchanged. At the same time, significant changes may relate to taxation issues, KYC/AML procedures, as well as regulatory powers.
The issue of determining the main regulator of the market remains relevant. The draft law currently stipulates that the National Bank of Ukraine may become the primary and virtually sole regulator of the virtual assets market. However, according to expert Daniil Voloshchuk, the NBU may not have full expertise in all aspects of the virtual assets market. Therefore, it would be advisable to limit the role of the National Bank to the financial sector only, while transferring control over other segments of the crypto market to additional bodies.
Market experts expect significant changes before the second reading so that the new law not only formalizes the rules but also promotes the development of innovations in Ukraine. Among the key proposals for refining the draft law:
- Limit excessively broad powers of the regulator to collect information to reduce risks for business and innovation. Requests should pertain only to specific checks and take into account the technological features of the market, including the possibility of providing data in blockchain or smart contract formats.
- Allow the issuance of tokens linked to assets and electronic money by all financial institutions that have the appropriate permits and licenses. This will help maintain competitiveness in the international market, as European practice shows the effectiveness of an open token issuance market for all credit institutions, not just banks. Currently, Ukrainian legislation limits this list.
- Maintain flexibility for residents of Diia.City by allowing them to work with virtual assets without losing their status and tax benefits. The mandatory transition to a general taxation system after transactions with virtual assets contradicts the principles of stability and predictability of the tax burden for IT companies over the past 25 years.
Despite the fundamental nature of the document and positive steps in the field of regulation, the draft law still contains a number of issues that require refinement or even a complete review.
“The aspects described above are specific examples of individual shortcomings; however, the text of the draft law contains a greater number of similar omissions.”