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Ukraine Drafts Law to Legalize Cryptocurrencies, Fuels Debate In Crypto Community

Samantha Chang
Last Updated October 2, 2020 4:45 PM

Ukraine is drafting legislation to legalize cryptocurrencies and asked members of the crypto community to participate. And boy, did they.

Alexei Mushak, a member of the Ukrainian parliament, posted a notice  on his Facebook page May 15. He said the Ukrainian government is preparing to legalize virtual currencies and asked for input from cryptocurrency experts.

“Below is the draft proposal for the general regulation of this market, “Mushak wrote. “These are the outcomes of many people’s work and meetings. There’s still a lot left to figure out. The final version will be ready in two weeks. Please comment and edit. Thoughts from market participants are particularly important.”

‘Free and Transparent Market’

Mushak then posted a link to a Google document  detailing the proposed law, whose goal is to establish rules for cryptocurrencies, to promote the use of blockchain technology, and the “establishment of a free and transparent market” in Ukraine.

“The document is aimed at the creation of a transparent cryptocurrency market in Ukraine,” Mushak wrote. “It is also proposed for stimulating the use of blockchain technology in social spheres, such as health care and education, as well as preventing unsubstantiated criminal prosecutions of cryptocurrency holders by the law enforcement agencies.”

Alexei Mushak is known as the chief “crypto-deputy” of the Ukrainian parliament,
Alexei Mushak. (YouTube)

The document also states that the law’s purpose is to prevent cryptocurrencies from being misused for “money-laundering and terrorism financing,” adding that such suspicions have caused “unjustified prosecutions” by government authorities.

Divided Opinion On Need For Regulation

The document was heavily edited by as many as 40 concerned crypto evangelists (see screenshot below).

While many users offered slight edits, such as “add a space here,” or “delete this word,” there were a number of emotional comments in the margins that suggest that members of Ukrainian crypto community are deeply divided on regulation.

Here’s a sampling of comments, roughly translated by Google Translate:

  • “Guys, come on. What is the purpose of this law? Regulation? Why?! Now the main problem is that banks do not allow legal transactions with the sale of cryptos and tokens.”
  • “It is not necessary immediately to introduce the regulation of ICOs, because they are the source of the greatest distrust of society to cryptocurrencies because there is very widespread fraud in this area. It would be worthwhile to highlight ICOs separately.”
  • “Without law, it’s a problem. The banking sector will respond to an asset that has a non-legal basis. Also, the second document goes to tax rules that are important to stimulate the industry.”
  • “The fact that a token asset will be considered a financial asset in any case is not correct and will cause unpleasant consequences. In fact, even the right to claim monetary obligation is a commodity, not a financial asset.”
  • “The best conditions for tokens now are to officially allow any transactions without restrictions or any licensing. Let the market develop calmly.”

As CCN.com has reported, Ukraine has been seriously considering comprehensive crypto regulations since January 2018. “Given the rapid development of cryptocurrencies in the world, this issue cannot be left out of the state’s attention,” according to a statement from Ukraine’s security council.

Regulators say a lack of government oversight of the crypto market poses a threat to Ukraine’s economy and national security. In a surprise revelation, officials also said the nation is considering launching its own virtual currency.

Featured image from Shutterstock.