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  • Writer's pictureP Xenos and M Bacina

Ukraine underline crypto policy in new AML law

The Ukrainian government has approved the final version of a money laundering law that will handle virtual assets and virtual asset service providers (VASPs) as per the Financial Action Task Force (FATF) guidelines.

Rada, Ukraine’s legislative body, published a final version of the law that considers virtual assets to be a store of wealth, while also recognizing its potential use in financial crimes, such as money laundering, fraud, and the financing of terrorists.

The new money laundering law includes certain guidelines regarding how the Ukraine government plans to regulate and extend oversight over cryptocurrency trading. One of the requirements, under the law, focuses specifically on individual virtual asset transactions that are valued at less than 30,000 hriven (approximately $1,846.15 AUD). For these transactions, the nation’s government says it will only obtain the sender’s public key for financial monitoring purposes.

If the transaction amount is greater than 30,000 hriven, then the government will verify both the sender and recipient of the transfer. The process will reportedly include ID verification, and will also attempt to verify the nature (if one exists) of the business relationship between the parties involved in the transaction.

For VASPs that transfers cryptocurrencies, the threshold has been set at 40,000 hryvnya (approximately $2,461.53 AUD). Should transactions be greater than this amount, then VASPs are required to provide the authorities with details such as whether traders registered in their respective jurisdictions, have complied with AML recommendations. VASPs must also inform authorities about if the traders are family members, whenever traders are foreigners, and also when cash transactions have been made.

Major global crypto exchange Binance is reportedly collaborating with Ukrainian authorities to establish cryptocurrency-related legislation in the country. Binance signed a memorandum of understanding with the Ministry of Digital Transformation of Ukraine to jointly work on the legal status of cryptocurrencies.

Binance CEO Changpeng Zhao (CZ) said in November that the legalization of cryptocurrencies and the adoption of progressive legislation can play a key role in bringing positive growth in the economy as well as attract additional investments.

Deputy Prime Minister Mykhailo Fedorov emphasized that Ukraine has finally entered a situation where the executive, legislative authorities and the market “have come to an understanding of the regulation of the Ukrainian cryptocurrency market.” He stated:

Thanks to this step, both Ukrainians and global cryptocurrency companies will be able to operate in Ukraine openly and transparently. In addition, we welcome Binance's willingness to provide us with advisory assistance as the experience of one of the leading world players in this field is very useful for us at the stage of forming the legislative framework and the conditions for market regulating.

As part of the agreement, the Ministry and Binance intend to form a working group focused on the strategy of blockchain implementations as well as the creation of “a new virtual assets and virtual currencies market in Ukraine.” Rapid developments are expected to ensue following this collaboration, and it was only in March of this year when Binance broke into the Australian market with the launch of Binance Lite Australia.


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