The new law defines rules for creating, issuing and selling virtual assets, and also introduces liability for violations of such rules
Ukraine’s Ministry of Digital Transformation proposed for public discussion on the draft legislation “Virtual Assets”, according to which the Ministry of Digital Affairs will act as a central executive body that creates and implements state policy in the field of cryptocurrency circulation.
It is reported that the bill was drafted jointly with the inter-factional deputy association Blockchain 4Uken and the blockchain community.
What the new law defines:
- The legal status of virtual property (VA), which allows you to regulate the establishment of such assets, their use and trading rights in the Ukrainian market
- Circle of subjects, market participants whose activities are subject to state registration
- IA emission regulations; It is also possible to carry out both public and private sales of VA
- IA market regulator, as well as the scope of its powers and functions, in particular, monitoring and supervising compliance with legislation in the area of GA circulation
- Liability for violation of rules of conduct by some participants in the IA market
Determining the legal status of cryptocurrencies
According to the legal document, cryptocurrency (virtual property) is property, whose treatment characteristics are determined by the Civil Code of Ukraine and the law on virtual property. The type of virtual property, the objects of civil rights that provide such property (for secure tokens), can be changed by its issuer during the civil circulation of the property. After making changes to the circulation of virtual assets, the corresponding legal regulation is enforced.
“The provision of a virtual property along with other items of civil rights is determined by the bill as the right of the owner of the property to declare that such objects of civil rights are based on the right of ownership , The terms of the agreement on the first sale of the secured token concluded between the digital asset and its issuer, or the issuer’s user Keeping Yan. “- Bill text on virtual assets.
The return of cryptocurrency from manufacturing, emissions and circulation
according to the law, Virtual wealth creation moment This is the beginning of the functioning of the token associated with the asset, if it is not possible to establish the moment of creation of VA in another way.
Virtual asset issue Creating it is the introduction of a virtual property in vogue. A virtual property is traded from the moment of its creation to the moment of its closing.
Secure token issuer Stopping a Secure Token, if:
- Civil rights items with which the token was secured went out of civil circulation for one reason or another.
- The circulation of a secure token is prohibited by law in Ukraine
In all other cases, crypto assets and secure tokens may be in circulation indefinitely.
Acquisition of virtual property rights
Ownership of crypto assets is obtained Creating a virtual property is based on the factThe conclusion and implementation of an agreement on the disposal of a virtual property or civil rights goods that secure such property is evidenced by the law or the criteria of a court decision, and the ownership of a crypto key.
A virtual asset disposal agreement also means a set of algorithms and functions of the same token circulation system within which a virtual asset is issued, provided that such algorithms and functions are ambiguous, adequately described, and such token circulation system Be brought to the attention of all users of, and also comply with the requirements of the law of Ukraine.
The owner of the virtual asset key (crypto key) is also the owner of the virtual asset, except:
- A crypto key or virtual asset is held by the custodian of the virtual property according to the terms of the agreement between the custodian and the owner of the key.
- The virtual asset is transferred to another person in storage according to a rule of law or a court decision
Ownership of a virtual property includes the right to own, use and dispose of such property.
Owners of crypto keys and crypto assets may dispose of them at their discretion (in particular, transfer ownership to another person), if it is not against the law.
Identification of participants in the cryptocurrency market
The new bill defines the rights and obligations of participants in the virtual asset market. Therefore, market participants have the right to:
- To operate independently with virtual assets, select a counterparty among the participants of the virtual property market
- Obtain from individuals working in the crypto market, the necessary, accessible and reliable information about such person, the rules of his work, a detailed list of conditions to be performed, opportunities available to protect his rights and more.
- To obtain appropriate quality of services from individuals working in the virtual asset market, and secure execution of transactions with virtual assets
- Open accounts in banking and other financial institutions
- Judicial and other ways to protect your rights to virtual property from the state and other participants of the virtual property market
- To protect your personal data in the manner prescribed by law “On the protection of personal data”
- Freely select the prices of virtual assets at which they are traded.
Required for market participants:
- Operate with virtual assets honestly and at your own risk
- Before operating with virtual assets, familiarize yourself with the working characteristics of the systems within which such operations are planned to be conducted.
- When operating with VA, strictly follow the requirements of the law on virtual assets, legislation on money laundering, international agreements and other regulatory legal acts regulating the VA market.
- At the request of other participants of the cryptocurrency market, VA’s service providers associated with turnover are obliged to provide necessary, inexpensive and reliable information about themselves, their rules of work, available options to protect the rights of their customers, and more.
Cryptocurrency exchange, crypto asset exchange service provider, custodian of such assets and crypto keys Activities should be carried out in accordance with the law of Ukraine based on a decision on their registration in the state register of qualified service providers related to the circulation of virtual property. It is clarified that while applying for registration The patrons must have a registered capital of 10 thousand euros – Hryvnia or in foreign currency. Keepers of virtual assets can also provide token-wallet services to users according to the text of the law.
Cryptocurrency exchanges must have a registered capital Equivalent to 20 thousand euros in hryvnia or in foreign currency. Further, their activities should comply with Article 6 of Article 15 of the Law on Virtual Property, providing:
- Disclosure of information on the applicant’s ownership structure, which will establish the applicant’s final beneficial owners or their absence
- The development and introduction of internal processes and control mechanisms that correspond to the type, type, complexity, and risk of providing a particular service aimed at curbing the wealth of income
- Possession of necessary capital generated in cases when it is determined by law, etc.
Furthermore, between the leaders and founders of such exchanges there can be only those with “impeccable business reputation in the understanding of the law on preventing and combating money laundering”.
Cryptocurrency issuer There may be individuals or legal entities with a registered location or a permanent establishment in Ukraine, and may purchase virtual property on their own behalf or by order of a third party. The issuer of the secure token is obliged to independently fulfill the primary merit of its activities related to the issue of tokens to inform the digital ministry.
Responsibility for violating the law on virtual assets
The Ministry of Currency will oversee the implementation of laws in the field of crypto asset circulation within the framework of legislation adopted to combat money laundering. It is noted that other state bodies may also regulate within their capacity.
How and for whom companies associated with virtual assets (cryptocurrency) will be punished:
- For doing activities related to such assets without state registration – penalty of 5 to 10 thousand non-taxable minimum income to citizens (NMDD)
- For carrying out VA related activities, which is beyond the scope of activities recorded in the State Register – Penalty in the amount of 5 to 10 thousand GDG
- For intentionally providing false or incorrect information while applying for registration – penalty in the amount of 1 to 2 thousand NMDG
- For failure to provide information, provision of willfully giving false information at the request of the Ministry of Statistics – fine up to 1 thousand NMDG
- To inform inconsistently the Ministry of Statistics about the change in the data recorded in the State Register, if such obligation is provided by law or bye-laws and regulations – fine in the amount of 1 thousand to 2 thousand NMDG
- To make ICO (public offer of virtual property) on behalf of the issuer or any other person, without informing the Ministry of Digital Affairs of such proposal in the manner prescribed by law – the amount of 10 to 50 thousand NMDG or from ICO Penalty up to 100% of the profits received.
- For publishing inaccurate or incomplete public information (or lack of such information) by the issuer of virtual property (or any other person on his behalf) – fine in the amount of 1 thousand to 2 thousand NMDG
- Failure to submit, submission of incomplete report or incorrect information to Ministry of Finance – fine up to 1 thousand NMDG
- Order for non-compliance or untimely implementation of the decisions of the Ministry of Digital Affairs or to eliminate the violation of law – fine in the amount of 1 thousand to 5 thousand NMDG
Full text of the bill can be found on virtual properties Website of Ministry of Digital Affairs.
Paypal magazine help
Earlier, the Ministry of Digital Transformation created a special working group on the development of legal acts to regulate viral property in Ukraine. Representatives of more than 20 state and non-governmental organizations were included in the newly created committee. These include the Ministry of Finance, National Bank of Ukraine, State Tax Service, Ukrainian Association of Fintech and Innovative Companies etc. The Deputy Minister of Digital Transformation on IT Development Oleksandr Bornyakov was appointed to a leadership position in the Working Group, together with the People’s Deputy and Chairman of the Blockchain 4 Youken Interfacial Association from the ruling faction.
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