- The NCSSM said that regulation of the cryptocurrency market is necessary to transition from the notional “Wild West” to “clear rules of the game.”
- Deputy Minister of Digital Transformation for IT Development Oleksandr Bornyakov said that stricter controls could have a negative impact on the development of the industry in Ukraine.
At the iForum conference attended by Incrypted’s editorial staff, representatives of the Ministry of Digitalization, the National Commission on Securities and Stock Markets (NCSSM), the Blockchain Association of Ukraine and other experts discussed the regulation of cryptocurrencies in Ukraine.
Data: Incrypted.
Maksym Libanov, a member of the NCSSM, said that regulation of the cryptocurrency market is necessary for the transition from the notional “Wild West” to “clear rules of the game”:
“You cannot build a civilized country and have an unregulated ‘Wild West’ in a significant segment of relations, which we all appreciate as such, which has a very positive impact on the economy and GDP of our country.”
Reminder, it is the SECP that is enshrined in the current Virtual Assets Bill as one of the primary regulators of the industry. Now the document is being revised to adapt it to the EU norms.
At this stage, however, the implementation of MiCA provisions into Ukrainian legislation is debatable. Deputy Minister of Digital Transformation for IT Development Oleksandr Bornyakov believes that excessive regulation could harm the existing crypto market in Ukraine.
He added that the rules that apply to traditional financial instruments or securities cannot be applied to the digital asset segment:
“Some regulators do not understand that you cannot ‘close the tap’ too much. [In the crypto industry] everything is developing so fast and evolutionary that if you limit it today to the current rules for the stock market, it won’t work.”
Libanov said the regulator’s main principles are predictability and consistency in the policies it pursues.
“The last thing a regulator should do is change the rules every two years and confuse the market permanently. The right regulator should first explain where we are going, regulate that path, and define the transition period as we reach our goal. It is clear that the end point is EU membership. This means that the legislation must be fully synchronized”.
The Deputy Minister of Digital Transformation for IT Development, however, said there are things that are worrisome about the proposed approach of the NCSFDC. For example, on the issue of fines that can be imposed on cryptocurrency companies for violations:
“It is written in the text [of the bill] that the Commission may, at its discretion, impose fines ranging from 1 hryvnia to 200 million hryvnias.”
A representative of the SECP noted that the draft law is being finalized and the final text is not yet available:
“This bill describes what this regulation will be at the end point […] We want to formulate transitional provisions and move as smoothly as possible from the wild west to civilized rules of the game.”
In February 2022, the Verkhovna Rada passed the law “On Virtual Assets”. It was signed by President Vladimir Zelensky in March of that year.
The EU, however, subsequently adopted MiCA regulations. Given Ukraine’s status as a candidate for EU membership, the already adopted Ukrainian document on virtual assets has been rewritten to synchronize regulatory approaches.
The current document enshrines two market regulators – the NBU and the NCSSM. The latter is now supervising the development of amendments to the law “On Virtual Assets”, as well as working on the law on taxation of cryptocurrencies.
In an earlier conversation with Incrypted, Bornyakov spoke about the risks of implementing MiCA for the crypto industry in Ukraine.
Bornyakov said about the risks of implementing MiCA for the crypto industry in Ukraine.