Ukraine Presents Cryptocurrency Regulation Bill

News and Analysis

Ukraine’s parliament, Verkhovna Rada, will review a bill on cryptocurrency regulation. The paper has been published at the parliament’s official website.

Remarkably, it is the first cryptocurrency bill to be published in any post-Soviet country. It is also one of the first such bills in the world. The document defines the basic concepts related to cryptocurrency, including its very term.

“Cryptocurrency is a program code subject to property laws being the subject of exchange contracts, data on which is recorded in and stored on a blockchain system,” the bill reads.

This means, according to the bill, that no cryptocurrency can be construed as a legal tender, and is only viewed as a means of exchange.

The advisor for the Head of Ukraine’s State Agency for E-Governance Konstantin Yarmolenko commented on the bill:

“The lawmakers have made one dramatic mistake. They made the National Bank responsible for regulation of cryptocurrencies, even though the regulator itself has stated on numerous occasions that cryptocurrency is not a currency, and therefore, is not a part of its jurisdiction.”

The lawmakers also believe that the government shall identify all people who run cryptocurrency operations in Ukraine, and access transaction data. However, most importantly, the bill suggests that the government will tax miners and exchanges.

The bill also stipulates that violation of its provisions would entail civil, administrative and criminal prosecution. For some unclear reason, the lawmakers also added a provision stating that cryptocurrency can’t be used to call for overthrowing the constitutional order and to violate the country’s territorial integrity.

Clause 5 of the bill notes that miners have the right to choose which cryptocurrency to mine. Essentially, should the bill is enforced, the government will be able to completely control the industry and tax it.

However, Clause 4 includes a provision suggesting that it won’t provide any consumer protection for cryptocurrency users.

“The state does not guarantee, nor it undertakes, to provide for operation of online services for cryptocurrency exchange.”

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