Ukraine: the government has approved the final version of the Anti-Money Laundering Act, which will also cover digital asset issues and virtual service providers (VASP) in accordance with FATF guidelines.

On 6th December the Ukrainian legislature published the final version of the law, which recognises virtual assets as a “value storehouse”, while noting their potential use in financial crimes such as money laundering, fraud and terrorist financing.

The government is creating a new law

The new law contains some guidelines on how the government intends to monitor and regulate the trade in crypto-currency. The legislation focuses, among other things, on individual crypto transactions worth less than 30,000 hryvnias (approximately $1,300), where the government will investigate the public key of the broadcaster for the purposes of so-called “financial monitoring”. However, when the transaction exceeds this amount, the government will apply the verification of both the broadcaster and the receiver. This process will include an examination of the identity as well as the nature of the business relationship.

In the case of VASP, the threshold is already above 40 000 hryvnia. VASP should also provide the authorities with relevant information when transaction participants are registered in jurisdictions that do not comply with anti-money laundering recommendations or are foreign nationals.

Ukraine a new cryptocurrencies centre in the region?

It is worth recalling that one of the largest crypto exchanges in the world, Binance, is said to be working today with the Ukrainian authorities to establish new legislation on digital currencies in Ukraine. The company signed a special protocol with the Ministry of Digital Transformation of Ukraine to work together on the legal status of cryptocurrencies. The company’s CEO, Changpeng Zhao (CZ), told the media in November that cryptocurrencies legalisation and the adoption of new regulations could play a key role in ensuring positive economic growth as well as attracting very large investors to the country.

As part of the agreement, the ministry and Binance intend to create a working group on blockchain implementation strategy and the creation of “new markets for virtual assets and currencies in Ukraine”.

It should be added that Belarus has also been trying to use the potential of new technology for several years by building, for example, a special industrial zone for blockchain.