Virtual assets in Ukraine
Author: Violetta Fedorko, Dynasty Law & Investment Lawyer
The adoption of the Law “On Virtual Assets” is a long-awaited news for the financial markets of our country, as previously there was no clearly defined legal act that could regulate relations in the field of virtual assets.
This Law will enter into force only after amendments to the Tax Legislation of Ukraine and some other laws of Ukraine concerning the taxation of transactions with cryptocurrencies. However, given all the actions of Russian troops on Ukrainian soil, it is likely that such changes are only a matter of time, because for legislators now the priority is those acts aimed at restoring the violated rights and freedoms of Ukrainian citizens.
Under the provisions of this Law, virtual assets are intangible assets that have value and are expressed by a set of data in electronic form. However, it is forbidden to pay for them in Ukraine, and it does not matter whether you pay for services provided / work performed, or for purchased property.
Among other things, in accordance with the provisions of this Law, the National Commission on Securities and Stock Market will be empowered to regulate the market for virtual assets, in particular:
✅ formulation and implementation of policy in the field of virtual assets;
✅ determining the order of circulation of virtual assets;
✅ issuing permits to virtual asset service providers;
✅ supervision and financial monitoring in the field of circulation of virtual assets (except for virtual assets secured by monetary values, which belong to the powers of the NBU).
In view of all this, the adoption of the Law on Virtual Assets will provide more opportunities for the development of the financial sector in our country. Thus, resident companies (non-residents) operating in the field of virtual assets will continue to be able to operate legally, and the Ukrainian population, in turn, will be able to easily gain access to the virtual assets market. However, its adoption is only the beginning, in addition, it is necessary to determine the taxation system and mechanisms to protect the rights and interests of participants in the market of virtual assets, as well as to coordinate the proposed changes with some other laws of Ukraine.