The use of cryptocurrency, as a rule, is not inconsistent with law. However, the governments of developed countries are only at the beginning of the path to the positive regulation of the cryptocurrency market.
This time, Ukraine has started its work on legalization of cryptocurrency. The draft law has been submitted to the country’s parliament (Verkhovna Rada). This document determines the legal status of bitcoin and other cryptocurrencies.
The authors of the draft say that Ukraine citizens hold about 3 billion US dollars in the cryptocurrency. However, the country’s legislation does not have the necessary means to protect the rights of crypto holders.
Such a protection has been assessed by legislators in 5% of an income from transactions of exchanging cryptocurrency for fiat currencies or buying goods with crypto. To be more precise, the income will be taxed in the form of a positive difference between the income received by a taxpayer from the sale of virtual assets (their exchange for national currency) and expenses associated with their acquisition and / or mining. In addition, the draft contains the definition of cryptocurrency: this is a virtual asset that has a legal status.
Ukrainian parliamentarians expect to significantly replenish the country’s budget, as well as attract foreign investors who would no longer be afraid of legal uncertainty.
We’ve asked an expert’s opinion on this issue. Michael Mikhailov, a legal practitioner and assistant judge from Ukraine, has expressed the following opinion:
“Such amendments to the Tax Code of Ukraine is an urgent necessity. I hope that this draw law will be adopted by our parliament. It is important to understand that our lawmakers are planning not only to introduce taxes on cryptocurrency transactions, but also to legally define its status. At the moment, the Ukrainian courts cannot protect parties to a contract, according to which payments have been made in crypto. We cannot consider it either as property or as a financial asset. Not so long ago, a claim of a man who fulfilled the work under the contract, but did not receive payment for it, was denied. The man applied to the court, but was left with nothing. The fact of violation of the contract by the defendant was proved. But there was no legal possibility to collect the debt from the defendant. It was absurd, but judges had no other choice.”
We believe that possible legalization of the cryptocurrency in one of the East European countries suggests that this asset is gaining mass adoption. No one should have any doubts about promising perspectives of the crypto market.
