On May 18, the Ministry of Digital Transformation of Ukraine published a new draft bill “On Virtual Assets” that aims to determine the legal status of crypto assets, rule of their circulation and issuance in the country.
However, the current version of the bill is not final and is open for discussion by the crypto community until June 5, 2020.
The main purpose of the new draft bill is to finally enable local crypto firms like exchanges to open bank accounts, according to one of the co-authors.
Michael Chobanian, the president of the Bitcoin Association Ukraine, an organization that co-authored the new bill alongside state authorities, law firms and industry players.
Chobanian says that crypto exchanges are still unable to set up a bank account in Ukraine to date. Therefore, the proposed draft bill is designed to finally bring legal presence to companies in Ukraine.
According to the bill, virtual asset service providers like crypto exchanges, issuers and users:
“have the right to open accounts in banking and other financial institutions.”
However, unlocking sufficient benefits for the crypto industry in Ukraine has its costs though. Andriy Khavryuchenko, founder of software firm DevNull.AI, points out:
Proposed legislation makes all cryptowallets in Ukraine illegal, unless they will register in "Digital Transformation Office".#statekillshttps://t.co/SwIiMKhcz7 (in Ukrainian) — akhavr (@akhavr) May 19, 2020
According to the draft law, local firms are required to register in order to operate a fiat-to-crypto business in Ukraine legally.
“If you do it without the registry, you are basically illegal, that’s what the law says.”
Such firms will have to ensure Anti-Money Laundering (AML) and Know Your Customer (KYC) compliance.
According to Chobanian, the new bill comes in response to a request by the Financial Action Task Force, or FATF. Last year, they announced that they would seek to adopt AML guidelines for crypto by June 2020.
In late 2019, the Ministry of Digital Transformation of Ukraine reportedly partnered with the Binance, to collaborate on local crypto legislation.
However, Chobanian states that Binance has not participated in authoring the bill “On Virtual Assets”, but is expected to give their feedback about the proposed law.