Bill to Legalize Cryptocurrencies in Ukraine

A bill to legalize cryptocurrencies in Ukraine by the first quarter of 2025 is under consideration, with a draft prepared by a parliamentary working group in collaboration with the National Bank and the International Monetary Fund (IMF), as reported by Ukrainska Pravda on Thursday.

Danylo Hetmantsev, head of the Ukrainian Parliament's Committee on Finance, Tax, and Customs Policy, confirmed that the draft law is nearly ready for its first reading. He expressed optimism that the legislation will be approved by early 2025.

> "We aim to pass this law and legalize cryptocurrency in the first quarter," he reportedly said.

Conversions of Crypto into Fiat Currencies Will be a Taxable Event

The proposed bill aims to not only legalize cryptocurrencies but also establish that digital assets will be subject to taxation. Similar to securities, profits from cryptocurrencies will be taxed when converted into fiat currency.

> "In consultations with European experts and the IMF, we are taking a very cautious approach to using cryptocurrencies for tax exemptions, as it could potentially facilitate tax evasion in traditional markets," said Hetmantsev.

In November 2023, Ukraine's parliament received a draft law outlining the taxation of virtual asset transactions, marking a critical step toward the full legalization of cryptocurrencies in the country. The upcoming legislation aims to provide clear regulatory guidelines for exchanges, traders, and investors, creating a more stable and secure framework for Ukraine's digital asset sector.

Ukrainian public officials have a notable history of cryptocurrency ownership. In 2021, various civil servants reported owning 46,351 bitcoin, valued at $2.7 billion at the time. Notably, the 19-year-old son of two national parliament members—himself a local politician—reported owning $24.6 million worth of monero.