May 25, 2022

A month ago, the Ukrainian parliament passed a law legalizing cryptocurrencies, setting the stage for the regulation and governance of cryptocurrencies like bitcoin. Today, President Volodymyr Zelensky signed the law “On Virtual Assets”, which creates the legal basis for the functioning of the regulated crypto market in the country.

According to reports from Cointelegraph, CoinDesk, and other digital asset-focused publications, cryptocurrency exchanges and digital asset processing companies will need to register with the government to operate legally in Ukraine, and banks will need to register for cryptocurrency companies. allowed to open.

The law reportedly empowers Ukraine’s National Commission on Securities and Stock Markets to set the country’s policy on digital assets, license the cryptocurrency business, and act as a financial watchdog. (Actually, the Ukrainian parliament passed a law legalizing cryptocurrencies in September, but President Zelenskiy soon vetoed the bill, as the country couldn’t afford to create a new regulatory body for cryptocurrencies. Governance.)

If you thought that cryptocurrency already Legally in Ukraine, you have many companies. According to the blockchain analytical organization Chainalysis, by 2020, Ukrainians, Russians and Venezuelans (in that order) were among the active retail users of digital currencies, even without formal regulation.

At the time, the head of research at Chainalysis told Coindesk that certain trends motivated Ukraine to take the top spot, including “a true tech environment” and “an enthusiastic environment for startups.” (Coindesk also noted that Eastern Europe has more cybercrime than other regions, which could play a role.)

The provisions adopted into the law have taken on new urgency: Ukraine has received at least $100 million in cryptocurrency donations since Russia invaded the country and began killing both soldiers and civilians, leaving about three million people behind. . flight. A country with a population of 42 million people. (NPR only compared the number of Ukrainian refugees who fled to Poland alone—about 1.8 million—with the population of Warsaw.)

Under the new law, Ukraine’s first crypto exchange, Kuna, will no longer be limited to helping the country spend donations directly to cryptocurrency-supporting providers, but will convert cryptocurrencies into much-needed fiat currency. Meanwhile, the country is also partnering with the Bahamas-based stock exchange giant FTX to deposit crypto contributions for Ukraine’s war effort to the National Bank of Ukraine for deposit.

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