Virtual Assets are Now Legalized in Ukraine!

In 2021, the global community is actively discussing the legalization of virtual assets such as cryptocurrencies. On 7 September 2021, Salvador became the first country in the world to adopt Bitcoin, the most popular cryptocurrency in the world, as legal tender. Now the citizens of this country can use this crypto to pay for any goods and services. 

And on the following day, the positive news on crypto adoption has come from Ukraine. The Parliament of this country has passed the law “On Virtual Assets”, 276 MPs have voted in favour. Now Ukraine has a real chance to become one of the main crypto centres in the world where investors’ rights will be protected by the Rule of Law. The fundamental decision for Ukraine! And it’s a great pleasure for us that the Hacken team represented by our CEO Dyma Budorin has been actively participating in the development of this document. Thus, we have a full right to say that Hacken has brought crypto changes to Ukraine!

Overview of the Market for Virtual Assets in Ukraine

According to the most recent data provided by Chainalysis, Ukraine holds the fourth position in the global ranking of countries by the adoption of cryptocurrencies by common people. Ukraine is ahead of such giants as the USA, China, and EU countries. The top-3 positions in this ranking are occupied by Vietnam, India, and Pakistan. In his recent statement, Maxym Demianyk, the advisor to the Minister of Digital Transformation, noted that the daily crypto turnover in Ukraine amounted to 1 bln UAH or close to $37 mln. What is more, at the beginning of 2021, Ukrainian public officials declared owning cryptocurrencies worth more than $2.6 bln. And, generally, based on the estimates made by the company TripleA, 5.5 million people in Ukraine or close to 12.7% of the country’s population may own cryptocurrencies, one of the highest figures in the world. However, prior to 8 September, the market for virtual assets in Ukraine was a “grey zone”, investors’ rights were not protected and law enforcement agencies did not have any power to trace the origin of virtual assets. 

Now, the situation is likely to change dramatically!  

The Role of Hacken in this Historical Decision

Hacken team has been actively assisting the Ministry of Digital Transformation of Ukraine in implementing reforms aimed at the adoption of virtual assets in Ukraine since the two parties signed the Memorandum of Cooperation in December 2020. Our team has provided valuable information on virtual assets to the Ministry and our CEO Dyma Budorin participated in a few industry events devoted to the discussion of the state of the virtual assets market in Ukraine. According to the most recent industry estimates made by the Ukrainian Venture Capital and Private Equity Association in cooperation with the Ministry of Digital Transformation of Ukraine, Hacken is the top crypto project by market capitalization in Ukraine. Also, we are a recognized global leader in the field of cybersecurity. That is why our CEO Dyma Budorin has been invited to participate in the development of the law “On Virtual Assets”. 

You may ask what is the value of this law for Hacken and our community? In the future, licensed cryptocurrencies will become a legal payment method in Ukraine. As a first step towards this target, the adoption of this law will allow non-banking financial institutions to carry out transactions involving virtual assets. Namely, a non-banking financial institution that is going to work with virtual assets has to get the license issued by the National Bank of Ukraine to carry out currency transactions and the permit to provide services involving the turnover of virtual assets. 

The Key Provisions of the Law “On Virtual Assets” 

The key idea of this law is to shift the crypto market in Ukraine from the “grey zone” to the regulated area. It’s the first time in the history of this Eastern European country when cryptocurrencies have gained legal status. This law is focused on facilitating the life of companies, investors, and common users who perform any activities in the market for virtual assets. Under this recently adopted law, the Ministry of Digital Transformation of Ukraine will be responsible for the implementation of the key provisions specified in this document:

• National and foreign crypto exchanges will be allowed to function in Ukraine on a legal basis;
• Banks will be able to open accounts in cryptocurrencies for their clients;
• Ukrainians will be able to declare their income received in cryptocurrencies;
• The role of a state will be to protect the rights of the crypto market players.

The adoption and, what’s the most important, proper implementation of this law will make virtual assets accessible to people in Ukraine and will attract foreign direct investments to this country leading to the creation of new well-paid jobs. Ukraine has been among the leaders in crypto adoption for the last few years, so the decision of the Ukrainian Parliament to legalize virtual assets is logical and will bring benefits to all parties involved including common people, businesses, investors, and a state. That is why most likely Ukraine will remain among the global leaders in crypto adoption in the coming future. 

It’s a great pleasure for the Hacken team to realize that our voice is heard by the top officials in Ukraine. Looking forward to seeing the first results of the implementation of this document. Hopefully, the Hacken community in Ukraine will be among the first players to benefit from this new law. 

Thank you for supporting our initiatives! Together we make historical changes!

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