Virtual assets in the law: In Ukraine, the long-awaited document for the launch of the market has been presented

Today, June 14, 2023, the National Securities and Stock Market Сommission together with international partners presented the text of the draft Law of Ukraine on Amendments to the Tax Code of Ukraine and other legislative acts of Ukraine on Regulation of Turnover to Representatives of Relevant State Bodies and the Market Community of Virtual Assets in Ukraine.

The meeting took place within the framework of the meeting of the Consultative Council on Regulation of Virtual Assets, which was attended by the management and specialists of the National Bank of Ukraine, international organizations, specialists of the National Bank of Ukraine, representatives of the deputies, specialized bodies, leading market specialists and other interested participants.

The NSSMC took the MiCA (Markets in Crypto assets) EU Regulation as the basis of the project, which will be implemented on the Ukrainian plane. Work on the document began in the fall of 2022 with the support of the USAID Project «Financial Sector Reform», which involved Ernst&Young as consultants.

The structure of the draft law consists of the following main layers:
– changes to the Tax Code of Ukraine,
– the new edition of the Law of Ukraine on Virtual Assets,
– changes to other legislative acts.

In general, the document outlines the mechanism of legal regulation, the scope of legal obligations for market participants, which must be observed, the concept of taxation, as well as the issue of protecting the rights of investors against fraud and other illegal actions in the market.

Ruslan Magomedov, the Chairman of the NSSMC, noted: «The NSSMC, together with like-minded people and partners, has been fruitfully working on the draft law for a long time and has finally shown its achievements. So Ukraine received a European road map of how and where to move in relation to the launch of the virtual asset market. The next step we see is the consideration of all suggestions and comments of colleagues who are familiar with the text, and the transfer of the project to the People’s Deputies in the relevant committee».

Ukraine is an associate member of the European Union and actively cooperates with the EU in the field of financial services regulation. Therefore, European integration is a reference point for the note of the Ukrainian market of virtual assets. Our country may become the first state in Europe to introduce MiCA into the legal field, as no jurisdiction has yet done so.

We will remind that in April 2023, the European Parliament approved new general rules for the supervision and protection of consumer rights regarding cryptocurrencies – Markets in Crypto assets (MiCA). The regulation will enter into force in the EU on June 29, 2023 and will be fully effective from December 30, 2024. MiCA is a document that provides for the regulation of virtual assets in the EU, protecting users and investors in this field.