A joint statement between the Ukrainian central bank and the country’s top financial regulators shows that existing legal concepts do not apply to cryptocurrencies. For example, they cannot be recognized as money, legal tender, currency or securities.
Crypto Legal Status Dilemma
Ukraine is actively working on the regulatory framework for cryptocurrencies. The country’s top financial regulators, the National Bank of Ukraine (NBU), the National Securities and Stock Market Commission (NCSSM), and the National Commission for the Regulation of Financial Services Markets, jointly issued a statement regarding cryptocurrencies on Thursday.
They noted the lack of one single approach to determine the legal status of cryptocurrencies or their regulations among the regulators of the world’s leading countries. As for Ukraine, cryptocurrency does not fall under any existing legislation so it “cannot be recognized as money” or “as a currency or legal tender of a foreign state and has no monetary value,” the three financial authorities explained. In addition, cryptocurrency cannot be recognized as electronic money, valuable paper, or money surrogate. According to their statement:
Despite the existence of numerous uses of cryptocurrency in the world including as a measure of value, a means of exchange and accumulation, its complex legal nature does not allow it to be identified with any of the related concepts (money, currency, currency value, legal tender, electronic money, securities, money surrogate, etc.).
Ukraine’s Cryptocurrency Bills
There have already been three proposals for cryptocurrency regulations in Ukraine.
“We have already submitted our comments” on the cryptocurrency draft laws, NBU deputy governor Oleg Churiy said at a central bank’s briefing on Thursday. “The introduction of such projects into the parliament is a little premature,” Ain news outlet quoted him saying. NCSSM Chairman Timur Khromaev also spoke at the same briefing. The publication quoted him saying:
We believe that changes in legislation should be consistent with international trends. This, of course, should not be ‘legislation on bitcoin.’ Such in the world does not exist. Legislation should be neutral to technology. These are the issues of using tools in a certain activity (for example, investment activity). Legislation should deal with functional issues.
According to the three financial regulators, they will continue to work on the legal status and regulatory framework of cryptocurrency, taking into account “the position of regulators in other countries and the latest trends in the development of such technologies.”
Meanwhile, they “warn that any activity related to buying, selling, exchanging and converting” cryptocurrencies involves a large number of risks, adding that “anyone who plans to invest in cryptocurrency should realize that they carry out such operations at their own risk.” Some Ukrainian lawmakers have invested in bitcoin. In August, three of them declared bitcoin holdings worth $47 million.