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Ukraine

Retail_Trading_Status

Allowed-Unregulated Unknown
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Status Changed

Previous status: Unclear

The primary difference between the two analyses lies in the assigned "Current Status" for retail cryptocurrency trading in Ukraine: the previous analysis states `Unclear`, while the new analysis states `In-Progress`. This change is justified by the incorporation of more recent information and a nuanced interpretation of the ongoing legislative developments in the new analysis. Justification for the differences: 1. **Evolution of Legislative Process and Timeliness of Information:** The previous analysis, while accurate in describing the dependency of the Law "On Virtual Assets" on tax amendments, characterized the situation as "Unclear" because the path to full implementation and the specifics of the tax regime were less defined at the time of its writing (implied to be early 2025, but without specific late 2024/early 2025 developments). It correctly identified the pending tax legislation as the main hurdle. The new analysis, dated June 2025, incorporates more recent developments from late 2024 and early to mid-2025. These include specific proposals for tax rates (e.g., "18% PIT plus a 5% wartime levy" or "up to 23%" as per NSSMC announcements in April 2025) and more concrete timelines for the adoption of the comprehensive legislation (e.g., "early to mid-2025," "first reading... in the first quarter, with full adoption planned by the end of the year"). This new information suggests active, ongoing work with discernible milestones and proposals, shifting the perception from a general state of uncertainty to a clear process underway. "In-Progress" better reflects this active development and movement towards a fully regulated environment. 2. **Nuance in Interpretation of "Permitted but Not Fully Regulated":** Both analyses agree that retail trading is currently permitted and widespread, operating in a gray area pending full legal operationalization. The previous analysis used "Unclear" to emphasize the lack of a fully active, comprehensive regulatory regime, including specific licensing and consumer protection. The new analysis, while acknowledging the same core issue (the Law "On Virtual Assets" is not yet fully in force), uses "In-Progress" to highlight that the legislative and regulatory framework is actively being finalized and implemented. It emphasizes the *process* of development rather than just the *absence* of the final state. The mention of Ukraine working to align with MiCA regulations further supports the "In-Progress" status, as this implies a structured, ongoing effort. 3. **Clarity on Regulatory Intent and Actions:** The new analysis provides more specific details about the actions and statements from regulatory bodies like the NSSMC regarding tax frameworks (e.g., the April 2025 NSSMC announcement on a new tax matrix). This demonstrates concrete steps being taken by the designated regulators, which supports the "In-Progress" status by showing that the development is not stalled but actively moving forward with specific proposals being tabled. The previous analysis mentioned draft laws but lacked these more recent, specific regulatory pronouncements. 4. **Emphasis on Forward Momentum:** "Unclear" can imply a more static or stagnant situation where the future direction is not well-defined. "In-Progress," on the other hand, conveys a dynamic situation with a clear direction, even if the final destination (full implementation) has not yet been reached. The new analysis, with its focus on recent legislative efforts, timelines, and specific tax proposals, paints a picture of forward momentum. In summary, the change from "Unclear" to "In-Progress" is justified because the new analysis reflects more current information indicating that Ukraine is not just in a state of legal ambiguity, but is actively and demonstrably working towards establishing a comprehensive and operational regulatory framework for retail cryptocurrency trading, with specific proposals and timelines now emerging. The core condition of the main law awaiting tax amendments remains, but the context around resolving this condition has evolved with more concrete actions and plans.

Analysis ID
#558
Version
Latest
Created
2025-06-26 13:26
Workflow Stage
Live

Executive Summary

As of June 2025, retail cryptocurrency trading in Ukraine is permitted, but the market largely operates without a comprehensive regulatory framework. Although the "On Virtual Assets Law" was signed in 2022, its full enactment is contingent upon the adoption of amendments to the Tax Code of Ukraine. The Ukrainian government is actively working to finalize and implement robust legislation, with proposals for a structured tax regime and licensing requirements for virtual asset service providers (VASPs) under the oversight of the National Securities and Stock Market Commission (NSSMC) and the National Bank of Ukraine (NBU).

Key Pillars

  • Legal Status and Classification: Defining virtual assets as intangible benefits with value, distinguishing between secured and unsecured virtual assets.

  • Regulatory Oversight: Vesting primary regulatory authority over the virtual assets market in the NSSMC, with the NBU overseeing financial virtual assets secured by currency valuables.

  • Licensing and Registration: Requiring virtual asset service providers (VASPs) to obtain permits from the NSSMC for services such as custody, exchange, transfer, and intermediary services.

  • Anti-Money Laundering (AML) and Counter-Terrorist Financing (CFT): Incorporating robust financial monitoring and customer identification (KYC) standards for crypto transactions.

  • Taxation: Establishing a clear tax regime for income derived from virtual assets.

Landmark Laws

Law of Ukraine "On Virtual Assets" (Law No. 2074-IX)
- Authority: Verkhovna Rada (Parliament of Ukraine), signed by President Volodymyr Zelenskyy.
- Date: Adopted by Parliament in September 2021, and signed into law by President Zelenskyy in March 2022 (with revisions).
- Summary: This foundational law formally recognizes virtual assets and determines their legal status, classification, and ownership. It designates the National Securities and Stock Market Commission (NSSMC) as the primary regulator for the virtual assets market and the National Bank of Ukraine (NBU) for virtual assets secured by currency valuables. However, it has not yet fully entered into force, as its implementation is conditional upon the adoption of amendments to the Tax Code concerning virtual assets.

Considerations

  • Asset Classification: Ukraine defines virtual assets as intangible benefits. They can be unsecured or secured, with secured virtual assets certifying property rights. The types of securities backing virtual assets are determined by the NSSMC.

  • Taxation: As of June 2025, a comprehensive and fully enacted tax framework for cryptocurrency is still in development. Proposed tax rates for individuals include an 18% personal income tax plus a 5% wartime levy (totaling 23%) on profits from crypto-to-fiat conversions or when crypto is used for goods/services. Crypto-to-crypto exchanges are generally not subject to taxation. For legal entities, corporate income tax on profits from virtual assets would be at the standard rate of 18%. A transitional rule might allow assets acquired before the law's full enactment to be taxed at a reduced rate (10% total) for 2026. The proposed amendments to the Tax Code related to virtual assets (Draft Law No. 10225-д) are expected to enter into force on January 1, 2026.

  • Regulatory Bodies: The National Securities and Stock Market Commission (NSSMC) and the National Bank of Ukraine (NBU) are the key regulators, with the Ministry of Digital Transformation also playing a coordinating role.

  • Licensing: There is currently no specific license for crypto operations in Ukraine, but a draft law "On Virtual Asset Markets" is under development to introduce a Crypto Asset Service Provider (CASP) license.

Notes

  • Ukraine has been actively pursuing the full legalization and regulation of its cryptocurrency market, aiming to align with the EU's MiCA standards. Despite the "On Virtual Assets Law" being signed in 2022, its operationalization is linked to corresponding amendments in the Tax Code, which were still being finalized and debated as of April 2025. Various draft laws, including Draft Law No. 10225-d, are progressing through parliamentary readings, with the goal of establishing clear rules and tax structures.

  • Recent developments indicate Ukraine's strong commitment to integrating digital assets into its economy. In June 2025, Bill 13356 was submitted to the Verkhovna Rada, proposing to allow the National Bank of Ukraine (NBU) to include Bitcoin and other cryptocurrencies as part of the country's national reserves, signaling a potential strategic shift in monetary policy. Although a national cryptocurrency reserve has not been officially established as of June 2025, legislative efforts are underway. Furthermore, Ukraine is exploring the development of a central bank digital currency (CBDC) known as the e-hryvnia.

Detailed Explanation

Ukraine's approach to retail crypto trading as of June 2025 is best characterized as "Allowed-UnRegulated," reflecting a transitional period where a foundational legal framework exists, but detailed operational and tax regulations are still in progress. The "Law of Ukraine on Virtual Assets" (Law No. 2074-IX), signed by President Zelenskyy in March 2022, provided the initial recognition of virtual assets and designated the National Securities and Stock Market Commission (NSSMC) and the National Bank of Ukraine (NBU) as key regulators. This law set the stage for a legal crypto market by defining the legal status, classification, and ownership of virtual assets, and outlining the conditions for service providers.However, the full implementation of this landmark legislation has been contingent upon the adoption of necessary amendments to Ukraine's Tax Code. This critical step has seen several proposals and discussions throughout 2024 and early 2025, highlighting the complexity of integrating digital assets into existing financial and tax systems. As of April 2025, the NSSMC proposed a taxation framework for certain crypto transactions, suggesting an 18% income tax along with a 5% wartime levy on profits from crypto-to-fiat conversions or purchases of goods/services. Importantly, crypto-to-crypto transactions are generally excluded from this proposed taxation. For legal entities, a standard 18% corporate income tax rate on profits from virtual assets has been proposed. While these tax proposals are advanced, their definitive enactment is anticipated, with some sources suggesting the amendments to the Tax Code (Draft Law No. 10225-d) could come into force by January 1, 2026.The ongoing legislative efforts signify Ukraine's ambition to create a transparent and regulated virtual asset market that aligns with European standards, particularly the MiCA regulation. This alignment is crucial for fostering investor protection and preventing financial illicit activities like tax evasion and money laundering. Beyond taxation, the regulatory framework is expected to establish clear licensing requirements for Virtual Asset Service Providers (VASPs), although a specific licensing regime is still under development as of June 2025.Furthermore, Ukraine's proactive stance in the crypto space is evident in recent initiatives, such as the proposed Bill 13356 in June 2025, which would grant the National Bank of Ukraine the authority to include Bitcoin and other digital assets in its national reserves. This move, while not yet fully implemented, underscores the country's consideration of crypto as a tool for macroeconomic stability, especially amid challenging economic circumstances. The development of an e-hryvnia, a central bank digital currency, further illustrates Ukraine's commitment to digital financial innovation.In summary, while retail crypto trading is allowed in Ukraine, the regulatory landscape as of June 2025 is still evolving from a foundational legal recognition towards a fully regulated environment. The focus remains on finalizing the "On Virtual Assets Law" through complementary tax legislation, establishing clear oversight by the NSSMC and NBU, and integrating robust AML/CFT measures, with the ultimate goal of creating a secure, transparent, and innovation-friendly digital asset market.

Summary Points

Here's a clear, well-structured bullet point summary of the detailed regulatory analysis report on Retail Crypto Trading in Ukraine:

### Ukraine: Retail Crypto Trading Regulatory Analysis (As of June 2025)

#### I. Current Regulatory Status

  • Overall Status: "Allowed-UnRegulated"
  • Retail cryptocurrency trading is permitted.
  • The market largely operates without a comprehensive, fully enacted regulatory framework.
  • Ukraine is in a transitional period, moving from foundational legal recognition towards a fully regulated environment.
  • Future Aim: To fully legalize cryptocurrencies by the end of 2025, aligning its framework with the European Union's MiCA (Markets in Crypto-Assets) standards.
  • Key Legislation Status: The "On Virtual Assets Law" (signed 2022) is not yet fully in force, as its implementation is contingent upon the adoption of amendments to the Tax Code of Ukraine.

#### II. Key Regulatory Bodies & Their Roles

  • National Securities and Stock Market Commission (NSSMC):
  • Designated as the primary regulator for the virtual assets market.
  • Responsible for determining the types of securities backing virtual assets.
  • Will be responsible for issuing permits to Virtual Asset Service Providers (VASPs).
  • National Bank of Ukraine (NBU):
  • Oversees financial virtual assets secured by currency valuables.
  • Exploring the development of a central bank digital currency (e-hryvnia).
  • Proposed to have the authority to include Bitcoin and other cryptocurrencies as part of the country's national reserves (Bill 13356).
  • Ministry of Digital Transformation: Plays a coordinating role in the development and integration of digital assets.
  • Verkhovna Rada (Parliament of Ukraine): Responsible for adopting legislation.
  • President Volodymyr Zelenskyy: Signs laws into force.

#### III. Landmark Legislation & Regulatory Framework

  • Law of Ukraine "On Virtual Assets" (Law No. 2074-IX):
  • Adoption: Adopted by Parliament in September 2021, signed into law by President Zelenskyy in March 2022.
  • Impact:
  • Formally recognizes virtual assets and determines their legal status, classification, and ownership.
  • Designates the NSSMC and NBU as key regulators for the virtual assets market.
  • Current Status: Has not yet fully entered into force; its implementation is conditional upon the adoption of amendments to the Tax Code concerning virtual assets.
  • Proposed Amendments to the Tax Code (Draft Law No. 10225-d):
  • Purpose: To establish a clear tax regime for virtual assets, which is crucial for the full enactment of the "On Virtual Assets Law."
  • Anticipated Entry into Force: Expected on January 1, 2026.
  • Draft Law "On Virtual Asset Markets": Currently under development to introduce a specific Crypto Asset Service Provider (CASP) license.

#### IV. Compliance Requirements (Proposed/Anticipated)

  • Licensing & Registration:
  • Virtual Asset Service Providers (VASPs) will be required to obtain permits from the NSSMC.
  • This will cover services such as custody, exchange, transfer, and intermediary services.
  • A specific CASP licensing framework is still being developed.
  • Anti-Money Laundering (AML) & Counter-Terrorist Financing (CFT):
  • The anticipated framework includes robust financial monitoring and customer identification (KYC) standards for crypto transactions.

#### V. Taxation Framework (Proposed)

  • Current Status: A comprehensive and fully enacted tax framework for cryptocurrency is still in development as of June 2025.
  • Proposed Rates (Individuals):
  • An 18% Personal Income Tax (PIT) plus a 5% wartime levy (totaling 23%) on profits derived from:
  • Crypto-to-fiat conversions.
  • Using crypto for goods or services.
  • Exemption: Crypto-to-crypto exchanges are generally not subject to taxation under the proposed framework.
  • Transitional Rule (Proposed): Assets acquired before the law's full enactment might be taxed at a reduced rate (10% total) for 2026.
  • Proposed Rates (Legal Entities):
  • Corporate income tax on profits from virtual assets would be at the standard rate of 18%.
  • Anticipated Enactment: The proposed amendments to the Tax Code (Draft Law No. 10225-d) are expected to enter into force on January 1, 2026.

#### VI. Key Restrictions & Limitations

  • Regulatory Gaps: The market largely operates without a comprehensive, fully enacted regulatory framework.
  • Conditional Enactment: The foundational "On Virtual Assets Law" is not yet fully operational due to pending amendments to the Tax Code.
  • No Specific Licensing: As of June 2025, there is no specific license for crypto operations in force, though a framework is under development.
  • Taxation Uncertainty: The proposed tax regime is not yet definitively enacted, leading to some uncertainty for market participants.

#### VII. Recent Developments & Future Outlook

  • EU MiCA Alignment: Ukraine is actively pursuing the full legalization and regulation of its cryptocurrency market, aiming to align with the EU's MiCA standards.
  • Legislative Progress: Various draft laws, including those related to tax amendments, are progressing through parliamentary readings.
  • National Reserves Consideration: In June 2025, Bill 13356 was submitted to the Verkhovna Rada, proposing to allow the NBU to include Bitcoin and other cryptocurrencies as part of the country's national reserves, signaling a potential strategic shift in monetary policy.
  • Central Bank Digital Currency (CBDC): Ukraine is exploring the development of an e-hryvnia.
  • Commitment: Ukraine demonstrates a strong commitment to integrating digital assets into its economy and creating a secure, transparent, and innovation-friendly digital asset market.

#### VIII. Asset Classification

  • Definition: Virtual assets are defined as intangible benefits with value.
  • Types: They can be unsecured or secured.
  • Secured Virtual Assets: Certify property rights.
  • Determination: The types of securities backing virtual assets are determined by the NSSMC.

Full Analysis Report

Report on Retail Cryptocurrency Trading Status in Ukraine

Date: 2025-06-26

Topic: Retail_Trading_Status

Description: Assess whether individual citizens and residents in the country are legally permitted to buy, sell, and hold cryptocurrencies. Detail the regulatory environment surrounding this activity (e.g., KYC/AML requirements imposed on platforms, general warnings issued).

Retail_Trading_Status: In-Progress

1. Identified Current Status: In-Progress

2. Detailed Narrative Explanation:

Retail cryptocurrency trading (buying, selling, and holding) by individual citizens and residents in Ukraine is currently permitted but operates in a legislative environment that is actively undergoing significant development towards a comprehensive regulatory framework. While not explicitly banned, and with a high adoption rate among the population, the full legal and regulatory structure is still being finalized and implemented.

Historically, Ukraine has been a notable country for cryptocurrency adoption. The Ukrainian government has shown a generally positive stance towards cryptocurrencies, recognizing their potential and the need for a clear legal framework. This was notably demonstrated by the passage of the Law of Ukraine "On Virtual Assets" by the Parliament in February 2022, which was subsequently signed by President Volodymyr Zelensky. This law aims to legalize and regulate cryptocurrencies, define the legal status, classification, and ownership of virtual assets, and establish regulatory bodies.

However, the Law "On Virtual Assets" is not yet fully in force. Its enactment is contingent upon the adoption of necessary amendments to the Tax Code of Ukraine to govern the taxation of transactions involving virtual assets. Several draft laws concerning the taxation of virtual assets and amendments to existing legislation are currently under consideration. These include proposals for taxing profits from cryptocurrency sales, with rates such as 18% Personal Income Tax (PIT) plus a 1.5% or 5% military levy being discussed. Some proposals also suggest preferential rates for an initial period or for specific types of crypto transactions. Crypto-to-crypto transactions are generally proposed to be exempt from taxation until conversion to fiat currency.

The primary regulators designated under the Law "On Virtual Assets" are the National Securities and Stock Market Commission (NSSMC) and the National Bank of Ukraine (NBU). The NSSMC is expected to oversee the broader virtual assets market, including licensing service providers, while the NBU will regulate virtual assets secured by currency valuables. There are ongoing discussions about the precise division of regulatory responsibilities, with some proposals suggesting the Cabinet of Ministers, in consultation with the NBU, will determine the market regulator.

Ukraine is also working to align its cryptocurrency legislation with international standards, particularly the European Union's Markets in Crypto-Assets (MiCA) regulation, as Ukraine is an EU candidate country. This alignment is expected to shape the final regulatory framework, including requirements for virtual asset service providers (VASPs) concerning licensing, capital, and AML/KYC procedures.

Even before the full implementation of the new law, AML/KYC requirements have been applicable to cryptocurrency transactions. Amendments to the Financial Monitoring (AML) law in 2020 brought virtual asset transactions under its purview, requiring VASPs to implement customer verification and transaction monitoring. Exchanges operating in Ukraine are generally expected to adhere to KYC policies. The OSCE has been involved in training Ukrainian officials on investigating crypto-asset crimes and understanding money laundering risks associated with virtual assets.

The Ministry of Digital Transformation has played a significant role in promoting the crypto industry and has even facilitated cryptocurrency donations to support Ukraine, particularly following the 2022 invasion. The NBU has also been exploring the concept of an e-hryvnia (CBDC), though this is distinct from private cryptocurrencies.

Recent developments in late 2024 and early 2025 indicate a concerted effort to finalize the legislative framework. Reports suggest that the comprehensive legislation, including tax rules, is expected to be adopted and come into effect by early to mid-2025. This will lead to a fully regulated environment for retail cryptocurrency trading.

Therefore, the status is "In-Progress" because while retail trading is allowed and widespread, the comprehensive legal and regulatory framework (including specific tax rules and licensing procedures for VASPs under the new law) is still in the final stages of development and implementation.

3. Specific, Relevant Text Excerpts:

  • CMS Law (referring to the Law "On Virtual Assets"): "Although the Law was adopted by the Parliament of Ukraine in February 2022, it is not yet in force. It will take effect once the necessary regulatory acts amending tax legislation are enacted to clarify the taxation of transactions involving virtual assets (incl. crypto)."
  • Kinstellar (on the Law "On Virtual Assets"): "The Law shall come into effect upon adoption of amendments to the Tax Code of Ukraine governing the taxation of transactions with virtual assets."
  • Blockworks (quoting Mykhailo Fedorov, Minister of Digital Transformation): “Foreign and Ukrainian crypto companies will be able to operate legally, while Ukrainians will have convenient and secure access to the global market for virtual assets.”
  • Hogan Lovells (on the signing of the Virtual Assets Bill): "President Volodymyr Zelensky signed the Virtual Assets Bill into law, enabling the launch of a legal market for virtual assets in Ukraine. The new market will be regulated by the National Securities and Stock Market Commission."
  • Binance Square (quoting NSSMC announcement, April 2025): "According to an announcement on April 8, 2025, the NSSMC, under the leadership of Mr. Ruslan Magomedov, has unveiled a new tax matrix to regulate the taxation of cryptocurrencies in #ukraine . According to the proposal, certain crypto transactions – specifically when users withdraw non-stablecoin cryptocurrencies to fiat currency or exchange them for goods/services without recognizing a financial loss – will be subject to a standard personal income tax rate of 18%, plus a 5% wartime levy applicable from December 2024. In total, the tax could reach up to 23%."
  • Digital Watch Observatory (April 2025): "Ukraine's securities regulator has outlined a new framework to tax crypto income at a combined rate of up to 23%. The proposal excludes crypto-to-crypto transactions and stablecoins."
  • Cointelegraph (December 2024): "Ukraine reportedly plans to legalize cryptocurrencies in early 2025, according to Daniil Getmantsev, head of the tax committee of the Verkhovna Rada, but the legislation will not include tax breaks."
  • IT Ukraine Association (undated, likely recent): "Legal aspects: Ukraine: Cryptocurrency is not a payment tool; taxation is complex and ambiguous. Individual entrepreneurs cannot include cryptocurrency in their income." (This highlights the current ambiguity pending new legislation).
  • Market Update Ukraine (March 2025): "The Ukrainian Parliament is set to review a bill to legalize cryptocurrency, aligning with European MiCA standards. This move aims to create a transparent virtual asset market, boost state revenues, and protect investors... The first reading of the draft law on the legalization of cryptocurrency should take place in the first quarter, with full adoption planned by the end of the year."

4. Direct, Accessible URL Links to Specific Sources:

Web Sources (28)

Sources discovered via web search grounding

Search queries used (6)
  • retail cryptocurrency trading status Ukraine 2024 2025
  • Ukraine cryptocurrency regulation law "On Virtual Assets"
  • National Securities and Stock Market Commission of Ukraine cryptocurrency
  • Ministry of Digital Transformation Ukraine cryptocurrency
  • AML/KYC cryptocurrency Ukraine
  • Taxation of cryptocurrency in Ukraine for individuals 2025
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