Ukraine proposes new DeFi regulations

Category: Crypto Europe

Under heavy criticism, the Ukrainian Rada has published its first proposal for new crypto regulatory measures to be implemented by July

The Ukrainian Rada has brought forth the nation’s first ever draft to regulate the crypto market. Satisfaction among traders, miners and lawmakers is rather low, however the Rada is pushing for the following rules to come into place by the ending of the last plenary week on July 13.

First of all, the age of anonymity will be terminated.

Rada UkrainaExchanges operating in the country will need authorization by the Ministry of Digital Transformation in the future, for which they will need to disclose their ownership structure and be able to monitor financial transactions of the clients in order to prevent illicit activities and money laundering. Business registration numbers will also be available to authorities.

Apart from that, Russian platforms are banned entirely.

On the client side, ID will be required to conduct crypto transactions, as well as information on bank accounts and electronic wallets, part of the so-called KYC (know-your-customer) policy.

The institutions in charge of these new measure will be the National Securities and Stock Market Commission and the National Bank of Ukraine, as well as the aforementioned Ministry of Digital Transformation.

The central bank was quick to address the numerous flaws in the Rada’s draft. First of all, neither investor protection nor crime prevention are included in the proposed regulations. Secondly, cryptocurrencies are not recognized as legal tenders, but also not restricted from any transactions, enabling the formation of a parallel financial system in the country. Possibly, the Rada will be able to make adjustments, however the current pressure to enforce the new law in due time suggests an imperfect publication.

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