Publication date: 08.06.2024
Legal regulation of cryptocurrencies and blockchain technologies in Ukraine
Introduction
Cryptocurrencies and blockchain technologies are becoming increasingly popular around the world, and Ukraine is no exception. They offer new opportunities for financial transactions, business, and innovation, but also raise numerous questions regarding legal regulation. In this article, we will analyze the main aspects of legal regulation of cryptocurrencies and blockchain technologies in Ukraine.
Legal framework
The Ukrainian legislation on cryptocurrencies and blockchain technologies is still in the process of being formed. The main legal acts regulating this area are:
- The Law of Ukraine "On Virtual Assets": Adopted in 2021, this law defines the legal status of virtual assets, including cryptocurrencies, and establishes rules for their circulation.
- The Tax Code of Ukraine: Defines tax liabilities in relation to cryptocurrency transactions.
- The Law of Ukraine "On Electronic Documents and Electronic Document Management": Regulates the use of electronic documents and signatures, which is important for blockchain technologies.
Main provisions of the Law "On Virtual Assets"
Definition of virtual assets:
- A virtual asset is defined as an intangible asset that has a value and is expressed in electronic form, including cryptocurrencies.
Legal status:
- Virtual assets are recognized as a legitimate object of civil legal relations.
- Owners of virtual assets have the right to own, use, and dispose of them.
Regulation of circulation:
- Transactions with virtual assets may be conducted through specialized platforms and intermediaries that must be registered and licensed.
- The law stipulates requirements for transparency and security of transactions with virtual assets.
Tax aspects
- Income taxation: Income from cryptocurrency transactions is subject to taxation in accordance with the Tax Code of Ukraine. Individuals pay personal income tax, and legal entities pay corporate income tax.
- Reporting: Cryptocurrency holders are required to submit relevant financial reports to the tax authorities.
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Use of blockchain technologies
Electronic document management:
- Blockchain technologies can be used to store and transfer electronic documents, which ensures transparency and immutability of data.
Smart contracts:
- Smart contracts (self-executing contracts) allow automating the execution of agreements, which greatly simplifies business relations and reduces risks.
Registration of property rights:
- The use of blockchain technologies for property registration can increase the efficiency and reliability of procedures.
Challenges and prospects
Legal uncertainty:
- Despite the adoption of the Law on Virtual Assets, many aspects of cryptocurrency and blockchain technologies remain unregulated or require additional legislative clarification.
Regulatory supervision:
- Effective regulatory oversight mechanisms should be established to prevent fraud and other offenses in the field of cryptocurrencies.
International cooperation:
- Ukraine should cooperate with other countries and international organizations to harmonize legislation and share experience
