Ukraine new location for crypto companies?
The Virtual Assets Law allows crypto companies to officially operate in Ukraine and pay taxes here. To register a crypto business, a company must prove that it is transparent and has an excellent reputation. The permit to establish a business costs over $3,100. To prevent money laundering and financial terrorism, crypto businesses must report their activity to the state.
The Ukrainian Ministry of Digital Transformation, as well as the National Bank of Ukraine and the National Securities Commission, are the main regulators of the virtual assets market, according to the law. The government also plans to establish another regulatory body that will issue permits to crypto companies in Ukraine.
After the adoption of the package of laws regulating cryptocurrencies and other virtual assets, Ukraine wants to make this market more transparent and attract investments to the country.
Cryptocurrencies are very popular among Ukrainians. According to Mykhailo Fedorov, the Ukrainian Minister of Digital Transformation, the daily turnover of virtual assets in Ukraine amounts to $37,000. If cryptocurrencies become legal and thus safer, more Ukrainians will invest in them.
A press spokesman continued:
Only a few countries in the world have legalized crypto-assets. These include Germany, Luxembourg, Singapore. Ukraine will be one of them.
However, experts are concerned that too many rules could stifle innovation and put pressure on businesses. Some crypto investors may leave the country because they don’t trust government initiatives.
Crypto miners now protected from crackdowns
Those who want to stay hope that the new legislation will reduce the number of unwarranted raids on crypto companies by Ukrainian security agencies. Ukrainian law enforcement agencies consider virtual money to be fraud and have been conducting raids on the companies, often seizing expensive equipment for no reason.
The country does not yet have a state registry of data centers used for crypto-mining, so many specialists work in secret, or move abroad to avoid raids.
According to Fedorov, this will change with the new law:
Favorable conditions will allow companies to register in Ukraine instead of abroad. Entrepreneurs will pay taxes to the budget, but will be protected by the state.