Crypto Legalization in Ukraine: The First Step is Taken!

🚀 The Cryptocurrency Bill in Ukraine Passed the First Reading: What’s Next?

Just yesterday we wrote that Ukraine topped the Chainalysis ranking, and today there is “fresh news”: after years of development, discussions, revisions, and months in “limbo,” the bill that legalizes cryptocurrencies and establishes taxation rules for operations with them has finally reached the Verkhovna Rada and passed its first reading.

Let’s break down what exactly the document envisions, how the adoption process will unfold, and when to expect the second reading.

Context

The process of legalizing cryptocurrencies in Ukraine has been stalling for several years. It seemed that an important step forward was taken in 2022: at that time, the draft law “On Virtual Assets” received the support of the Verkhovna Rada and the signature of President Volodymyr Zelensky.

However, the document never came into force, since it first required amendments to the Tax Code, which had not been developed at the time. Later, it was decided to rewrite the law taking into account the European MiCA regulation and Ukraine’s status as an EU candidate.

As a result, two alternative versions of the bill appeared, drafted by different regulators — the National Securities and Stock Market Commission (NSSMC) and the Ministry of Digital Transformation. Neither became the final “winner.” The Verkhovna Rada and the National Bank rejected the possibility of adopting these drafts as they were presented. After discussions, a third version appeared, which was supported in April by the Committee on Finance, Taxation, and Customs Policy, and in September, MPs adopted it in the first reading.

What does the bill provide?

Key provisions and regulator

The law establishes basic industry regulations, including: defining a wide range of terms; requirements for service providers; classification of virtual assets:

Electronic money tokens — pegged exclusively to the value of a single official currency;

Asset-backed tokens — pegged to any civil rights objects, including combinations of several currencies;

Other tokens, types to be determined by the regulator (not yet finalized — the NBU and/or an authority appointed by the Cabinet of Ministers).

An important clarification is the wording “and/or.” As lawyer Danylo Voloshchuk noted, the regulator may remain the NBU, or the functions may be distributed among different bodies.

The regulator is granted wide powers: conducting on-site inspections, access to documents and premises (except housing) to control the activities of service providers.

Service providers

Crypto service providers (exchanges, exchangers, etc.) must:

be authorized by the regulator;

provide annual activity reports;

bear responsibility for incomplete or inaccurate reports (fines).

The bill does not require providers to act as tax agents for their clients, as previously proposed.

Taxation

For individuals:

• 18% of annual profit + 5% military levy;
• preferential taxation in the first year: 5% without proof of acquisition costs.

• Not subject to tax:

  
  

  income from exchanging one crypto asset for another;

  
  

  cryptocurrency sales for amounts less than the minimum wage;

  
  

  issuance or free receipt of assets from the issuer.

For legal entities:

• corporate profit tax under general rules — 18%.

What’s next?

The bill will be finalized for the second reading. According to MP Yaroslav Zhelezniak, the text may change significantly — by up to 50–70% during the amendment process.

Possible changes concern:

• taxation;
• KYC/AML procedures;
• defining the regulator and its powers;
• limiting overly broad rights of the regulator to collect information;
• allowing token issuance by all licensed financial institutions;
• preserving flexibility for Diia.City residents.

Basic definitions and general principles of investor protection typically remain unchanged.

The final role of the NBU as the main regulator has not yet been determined — another body may be responsible for other aspects of the crypto market.

⚡️ Timing of the second reading

Formally, a minimum of 14 days is set between the first and second reading, but in practice the process may take 1.5–6 months or more. Finalization of the document may take 2–3 months, and market participants expect that the changes will make the law not just a formality, but a stimulus for innovation growth in Ukraine.