Ukrainian Parliament Adopted a New Law “On Virtual Assets”. What Changed?

On Thursday, February 17, the Parliament of Ukraine, with a majority of 272 votes, adopted the updated law “On Virtual Assets”, which regulates operations with digital assets in the country.

As you know, the first version of the bill, adopted by Parliament in September 2021, was vetoed by President Volodymyr Zelensky. And he proposed some changes.

In the new version, the authors of the document took into account the recommendations of the president and made the appropriate changes.

According to the updated law, the Ministry of Digital Development will no longer act as an interim market regulator, and there is no longer a need to create a new regulatory body specifically to perform these functions. From now on, state regulation of the industry will be carried out by the National Commission for Securities and Stock Market (NKTSBFR), as well as the National Bank of Ukraine.

As representatives of the National Securities and Stock Market Commission reported in a comment to Forklog, the department is entrusted with partial regulation of the market and licensing of cryptocurrency companies. The jurisdiction of the NBU includes virtual assets secured by currency values, and all other types of virtual assets, including secured securities or derivative financial instruments, will be regulated by the National Commission.

The department clarified that the new law does not regulate cryptocurrencies, but fixes the regulation of service providers associated with them. These issues will also be dealt with by the National Commission.

Regulation will be carried out with the help of tools for tracking capital in financial markets, such as maintaining accounting documentation by licensees and submitting it to the appropriate authority for analysis within a certain period.

Licensed service providers will be able to store, manage, exchange, transfer virtual assets and provide services related to these assets as an intermediary.

Service providers will be able to obtain a license to operate from the National Commission, subject to the formed authorized capital, the presence of a KYC/AML policy and a few more requirements. You will have to renew your license every year. In addition, the regulator has the right to suspend the license of a service provider in case of violation of the legislation of Ukraine.

Also, the regulator should develop a regulatory framework and procedure for considering cases of liability for violation of the Law “On Virtual Assets”, including the imposition of financial sanctions.

But the Law “On Virtual Assets” can come into force only after the adoption of changes to the Tax Code. Therefore, soon a draft law “On Amendments to the Tax Code of Ukraine” will be registered in the Verkhovna Rada. It will regulate all aspects of the taxation of virtual assets and the activities of professional participants in this market.

According to the Constitution of Ukraine, the president has to sign the law within ten days.

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