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Ukraine: Cryptocurrency Mining Soon to Be Recognized as an Economic Activity

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Ukraine’s capital, Kiev, is planning to introduce cryptocurrency mining as an economic activity in the state register. A draft has been requested by the economy, finance, justice and energy ministries as well as the e-government agency and the Ukrainian statistical service. The Central Bank and Security Service of Ukraine (SBU) are also invited by Stepan Kubiev, the Minister of Economic Development.

“By adding the crypto mining sector to the classifier, we will bring it out of the shadow economy and collect more budget revenues,” said Kubiev.

The State Financial Monitoring Service of Ukraine (SFMS) published a post related to cryptocurrencies on their website on February 28th 2018. They first linked documents from the Financial Action Task Force on Money Laundering (FATF), which explained virtual currency definitions, approaching cryptocurrencies, and a risk-based approach for other “Internet based payment methods”. After other lengthy details, they stated that no decision, positive or negative, has been made regarding cryptocurrencies. They were planning to discuss the legal status sometime in the future and create regulations for these virtual currencies. It was also noted that cryptocurrencies were mostly used for money laundering and terrorist activities, which is why criminal acts must be prevented in the upcoming mandates.

While the government of Ukraine has warned against the “extremely risky nature” of cryptocurrencies, the country has three cryptocurrency bills in process. The first one, “On the Circulation of Cryptocurrency in Ukraine”, was submitted to parliament on October 6th 2017 and it focuses on legalizing Bitcoin. The second one, “On Stimulating the Market of Cryptocurrencies and their Derivatives”, talks about cryptocurrency derivatives and investments, and was submitted on October 10th 2017. The third one, “On Amendments to the Tax Code of Ukraine”, was submitted in the last week of October and focused on taxes for cryptocurrencies. More than five months have passed, but no significant progress has been made on any of these bills by the Ukrainian parliament.

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