New Bill in Ukraine to Finally Let Crypto Firms Open Bank Accounts

Ukraine is getting closer to providing a legal status for cryptocurrencies like Bitcoin (BTC) with a new draft bill published on Monday.

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. The current version of the bill is not final and is open for discussion by the crypto community until June 5, 2020.

Crypto industry in Ukraine is still in “grey zone”

According to one of the co-authors of the new draft bill, the main purpose of the initiative is to finally enable local crypto firms like exchanges to open bank accounts. 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, says that crypto exchanges are still unable to set up a bank account in Ukraine to date.

As such, the proposed draft bill is designed to move the crypto industry out of the “grey zone” and finally bring legal presence to companies in Ukraine. According to the bill, virtual asset service providers — crypto exchanges, issuers and users — “have the right to open accounts in banking and other financial institutions.”

Only registered crypto firms are going to be “legal”

Unlocking sufficient benefits for the crypto industry in Ukraine has its costs though. Earlier this week, Andriy Khavryuchenko, founder of software firm DevNull.AI, tweeted that Ukraine’s bill “On Virtual Assets” would make all crypto wallets in Ukraine illegal, unless they registered with the Ministry.

According to the draft law, local firms are required to register in order to operate a fiat-to-crypto business in Ukraine legally, Chobanian elaborated to Cointelegraph. “If you do it without the registry, you are basically illegal, that’s what the law says,” Chobanian noted. The executive also pointed out that such firms will have to ensure Anti-Money Laundering, or AML, and Know Your Customer, or KYC, compliance.

Ukraine’s crypto law comes in response to FATF’s AML requirements

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.

Ukraine has been considering a law to regulate crypto assets for at least four years. First reports on Ukrainian crypto regulation came in late 2015, when the Verkhovna Rada of Ukraine announced plans to define the legal status of Bitcoin by January 2016. Similar to Russia, none of the existing crypto legislation initiatives have been adopted so far in Ukraine.

Local authorities are reportedly working on at least three separate bills, including one devoted to cryptocurrency taxation. In late 2019, the Ministry of Digital Transformation of Ukraine reportedly partnered with the world’s largest crypto exchange, Binance, to collaborate on local crypto legislation. According to Chobanian, Binance has not participated in authoring the bill “On Virtual Assets”, but is expected to give their feedback about the proposed law.