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Ukraine Advances Toward Legalizing Cryptocurrency Industry Amid Tax Overhaul

Ukraine Advances Toward Legalizing Cryptocurrency Industry Amid Tax Overhaul

Ukraine’s parliament approved the first reading of a bill imposing a 23% tax on digital asset profits, while addressing regulatory gaps tied to illicit flows and wartime vulnerabilities.

Fact Check
The provided evidence consistently reports that Ukraine's parliament is actively processing legislation to formally legalize and regulate the cryptocurrency industry. Multiple sources confirm that a key component of this effort is the creation of a new tax framework for digital assets, with draft laws having passed initial readings. The legalization process is explicitly dependent on these tax code amendments, validating the claim that Ukraine is advancing toward legalization amid a tax overhaul.
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Summary

Ukraine’s parliament passed the first reading of a cryptocurrency legalization and taxation bill with 246 votes in favor. The legislation proposes an 18% personal income tax plus a 5% military levy on digital asset profits, alongside a preferential 5% tax rate on crypto-to-fiat conversions during the first year. Lawmaker Yaroslav Zhelezniak confirmed the bill’s passage but highlighted that significant changes are expected before the second reading. The regulatory authority remains undecided between the National Bank of Ukraine and the National Securities and Stock Market Commission. The Royal United Services Institute estimates Ukraine has lost at least $10 billion in funds and tax revenue due to insufficient regulation. The urgency is heightened by wartime conditions, where OTC markets and criminal networks facilitate money laundering and illicit financing. Ukraine must align its crypto regulations with EU standards by the end of 2025 to avoid potential FATF downgrades.

Terms & Concepts
  • Crypto Legalization: The process of formally recognizing cryptocurrency operations under national law, providing a legal framework for businesses and investors.
  • Digital Asset Gains: Profits earned from the appreciation or trading of cryptocurrencies or other blockchain-based assets.
  • Fiat Conversion: The process of exchanging cryptocurrencies into government-issued currency such as dollars, euros, or hryvnia.