Ukraine Won't Regulate Crypto Mining, Government Ministry Says

In a new manifesto, Ukraine's Ministry of Digital Transformation has indicated it won't be creating regulations for the crypto mining sector.

AccessTimeIconFeb 10, 2020 at 12:35 p.m. UTC
Updated Sep 13, 2021 at 12:16 p.m. UTC
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Ukraine's Ministry of Digital Transformation has indicated it won't be creating regulations for the crypto mining sector.

In a document published on Friday, the government branch responsible for the digitization of Ukraine's economy listed the main principles of the country's approach to the crypto assets.

The main goals for the government in the field should be "formation and implementation of state policy in the field of digitization, digital economy, digital innovation, e-governance and e-democracy, development of information society; assuring the development of virtual assets, blockchain and tokenization, artificial intelligence," the document reads.

Most notably, the ministry said it has no plans to bring in rules to regulate crypto mining as that industry is already self-governed by blockchain consensus rules.

"We remain loyal to mining activities that form part of open decentralized networks. Mining does not require regulatory activity from governmental oversight bodies or other third-party regulations, this activity is regulated by the protocol itself and network members," the manifesto states.

The ministry will also "contribute to the development and market introduction" of distributed ledgers, support "any innovation using these digital technologies, even if they are partially unregulated and/or not defined by national law" and create regulatory sandboxes for the blockchain industry.

The government will further seek to adopt the world's best practices when it comes to taxing cryptocurrency-related income. A draft bill on taxation was submitted to the country’s parliament, the Verkhovna Rada, in November.

In addition, the manifesto says, Ukraine aims to facilitate the interaction between the traditional finance and crypto markets and prevent misconduct by service providers and law enforcement agencies.

With pressure from external agencies, however, the head of the Ministry of Finance, Oksana Makarova, said late in January the nation's financial watchdog intends to track crypto transactions exceeding $1,200 USD. The move was to align Ukraine's anti-money laundering practices with the latest Financial Action Task Force recommendations around cryptocurrency transactions, Makarova said.

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