Ukrainian President rejects crypto bill, demands changes

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Ukraine’s one-year marathon to legalize cryptocurrencies has taken a detour. Instead of signing the country’s first bill regulating digital assets, President Volodymyr Zelensky sent it back to parliament for amendment.

According to an announcement on the president’s website, Zelensky wants the bill to be amended so that the National Securities and Stock Markets Commission, the Ukrainian equivalent of the United States’ Securities and Exchange Commission, becomes the main regulator of cryptography. In the current version, the Ministry of Digital Transformation regulates cryptocurrencies, the National Securities and Stock Market Commission regulates digital asset-backed assets, and the National Bank of Ukraine is responsible for issuing the central bank digital currency (CBDC).

The version proposed by the president leaves oversight of the CBDC to the National Bank, but everything else falls to the securities regulator, including licensing of crypto brokers and other services.

In particular, public reports from the International Organization of Securities Commissions (IOSCO) indicate that certain types of virtual assets contain, in their economic essence, characteristics characteristic of financial instruments. Regulation of the issuance of these types of virtual assets should be carried out by financial market regulators, as this function is specific to them, said the president’s message to parliament, which was posted on the legislatures website.

Parliament will now have to hear the bill again and propose a new version.

The bill, introduced in parliament last summer, was created with input from the local crypto community. The document passed a second hearing in September and was sent to Zelensky for signature.

Ukraine is home to several well-known blockchain developers and startups. However, the country is struggling with its status as a risky jurisdiction in the global market. The bill, sponsored by the Ukrainian Ministry of Digital Transformation, aims to develop the digital asset market and attract crypto companies to the country.

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Read more: From Risky to Promising: Ukraine Seeks to Become a Crypto’s Dream Jurisdiction

Cut out Russia

The law defines digital assets as intangible assets that have value and are represented by a set of data in electronic form. Digital assets are divided into two groups: those that are backed by other assets and those that are not. Digital assets cannot be used to directly pay for goods and services in Ukraine.

Digital assets also include the CBDC, which the central bank can issue, in accordance with the recently passed Payment Services Act.

The new bill defines legal ownership of a digital asset as control over its keys, unless they have been stolen or held by a custodian, either due to an agreement with the owner or due to ‘a court decision. The document also details the basic operating rules for companies working with digital assets in Ukraine.

As the bill progressed through the Verkhovna Rada legislative process, the original text was updated to say that no crypto company with beneficiaries or executives in the attacking state can do doing business in Ukraine.

By the aggressor state, the authors mean Russia, the Digital Transformation Ministry confirmed to CoinDesk. The neighboring country to the east made its presence felt seven years ago, annexing the Crimean Peninsula and fueling latent civil unrest in the eastern part of Ukraine with unidentified weapons and troops.

Also Read: Ukraine Leads Global Crypto Adoption, Says Chainalysis In New Report

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