Is Crypto Legal in Ukraine?
Regulatory Bodies
National Bank of Ukraine (NBU): Responsible for the regulation of virtual assets secured by currency (fiat-backed stablecoins) and for payment services involving virtual assets.
Ministry of Digital Transformation of Ukraine (MinDigital): Responsible for the regulation of other types of virtual assets, including licensing of Virtual Asset Service Providers (VASPs).
Reporting Authority: All suspicious transaction reports are submitted to the State Financial Monitoring Service of Ukraine (SFMS).
Operating Models
9/9 verdictsCan specific business models operate in Ukraine? Each card answers the operational question for one kind of operator. Curated cells reflect counsel-grade review; AI-generated cells should be confirmed before relying on them.
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AI · UnreviewedPrimary Legislation
| Law / Regulation | Year | Scope |
|---|---|---|
| A major gap exists between paper law and practical reality | A major gap exists between paper law and practical reality: while the AML law technically covers virtual asset service providers, the SSFM cannot effectively supervise unlicensed entities operating in the market Ukraine - United States… |
Licensing Requirements
Define virtual assets and their legal status.
Regulate the market for virtual assets.
Protect the rights of participants in the virtual asset market.
Establish anti-money laundering and counter-terrorist financing (AML/CFT) requirements for virtual asset service providers (VASPs).
National Bank of Ukraine (NBU): Responsible for the regulation of virtual assets secured by currency (fiat-backed stablecoins) and for payment services involving virtual assets.
Ministry of Digital Transformation of Ukraine (MinDigital): Responsible for the regulation of other types of virtual assets, including licensing of Virtual Asset Service Providers (VASPs).
State Financial Monitoring Service of Ukraine (SFMS): Responsible for financial monitoring of transactions with virtual assets and ensuring compliance with AML/CFT legislation.
While the VA Law is in force, its full implementation, particularly the practical licensing mechanism, depends on the adoption of secondary legislation (resolutions, procedures, and detailed requirements) by the NBU and MinDigital.
As of late 2023/early 2024, this secondary legislation has not yet been fully adopted, meaning the actual process for obtaining a license is largely suspended or not fully operational. The focus of the government has been on wartime priorities.
Exchange services between virtual assets and fiat currencies. (This covers traditional crypto exchanges).
Exchange services between different virtual assets. (Also covered by crypto exchanges).
Transfer of virtual assets. (This includes payment processors that handle virtual assets).
Custody and/or administration of virtual assets or instruments enabling control over virtual assets. (This covers custody providers).
Participation in and provision of financial services related to the issuance/sale of virtual assets.
Exchanges (Trading Platforms): Will require a VASP license covering "exchange services."
Custody Providers: Will require a VASP license covering "custody and/or administration services."
Payment Processors: If they facilitate transfers of virtual assets or exchanges between virtual assets and fiat, they will require a VASP license covering the relevant service (transfer, exchange).
Currently, the exact, officially finalized capital requirements are pending the adoption of secondary legislation.
For exchanges (providers of exchange services between virtual assets and fiat): Potentially around UAH 10 million (approx. $250,000 - $300,000, subject to exchange rate fluctuations).
For other VASP activities (e.g., custody, transfer): Potentially around UAH 5 million (approx. $125,000 - $150,000).
These are indicative figures from drafts and should be verified once official regulations are published.
VASPs will be subject to the Law of Ukraine "On Preventing and Countering Legalization (Laundering) of Criminal Proceeds, Terrorist Financing and Financing the Proliferation of Weapons of Mass Destruction."
Customer Due Diligence (CDD): Identifying and verifying the identity of clients (KYC - Know Your Customer) and beneficial owners.
Transaction Monitoring: Monitoring transactions for suspicious activities, including large value transactions.
Reporting: Reporting suspicious transactions to the State Financial Monitoring Service (SFMS).
Risk Assessment: Implementing a risk-based approach to identify, assess, and mitigate money laundering and terrorist financing risks.
Record-keeping: Maintaining records of transactions and CDD information for a specified period.
Designated AML Officer: Appointing a qualified AML officer.
Travel Rule: Implementing measures to collect and transmit originator and beneficiary information for virtual asset transfers.
Law of Ukraine "On Preventing and Countering Legalization (Laundering) of Criminal Proceeds, Terrorist Financing and Financing the Proliferation of Weapons of Mass Destruction" (Закон України "Про запобігання та протидію легалізації (відмиванню) доходів, одержаних злочинним шляхом, фінансуванню тероризму та фінансуванню розповсюдження зброї масового знищення"): Link to Ukrainian Parliament (Verkhovna Rada) website
VASPs must be established as a legal entity in Ukraine (e.g., a Limited Liability Company - LLC).
They will likely require a physical office in Ukraine.
Local management and personnel will be necessary to ensure operational presence and compliance.
Fit and Proper Requirements: Directors, senior management, and beneficial owners will need to demonstrate good repute, relevant experience, and no serious criminal convictions.
Beneficial Ownership Disclosure: Transparency regarding ultimate beneficial owners will be required.
VASPs will need to demonstrate robust cybersecurity measures and IT infrastructure to protect virtual assets and customer data.
Risk management systems for operational and security risks.
Business continuity and disaster recovery plans.
Application form (to be provided by the regulator).
Corporate documents of the applicant legal entity (registration certificate, charter, etc.).
Detailed business plan outlining proposed services, target market, operational procedures, and financial projections.
Comprehensive AML/CFT policies and internal control procedures, risk assessment.
Information on management and beneficial owners (CVs, background checks, proof of reputation).
Technical and cybersecurity documentation (system architecture, security audits, data protection policies).
Proof of local presence (office lease, etc.).
Submission: The application package will be submitted to the relevant regulatory authority (MinDigital or NBU).
Review and Assessment: The regulator will review the application for completeness and compliance with all legal and regulatory requirements. This may involve requests for additional information or clarification.
On-site Inspection (Possible): Depending on the regulator's discretion, an on-site inspection of the applicant's premises and systems might be conducted.
Decision: The regulator will issue a decision to grant or deny the license.
Ongoing Compliance: Once licensed, VASPs must adhere to continuous reporting obligations, AML/CFT requirements, and other regulatory standards.
Delayed Secondary Legislation: The primary reason for the practical inability to obtain a license is the delay in adopting the necessary secondary legislative acts and detailed procedures by the NBU and MinDigital. Government resources and focus have been redirected to defense and wartime governance.
Operational Challenges: Even if licenses were available, operating a virtual asset business in a war-torn country presents immense logistical, security, and financial challenges.
Investor Hesitation: The war naturally deters significant foreign investment and new market entrants.
Focus on Essential Services: Regulatory bodies are prioritizing the stability of the traditional financial system and essential digital services.
Increased AML/CFT Scrutiny: Due to the war and sanctions, there is heightened scrutiny on financial flows, including virtual assets, to prevent their use for illicit purposes or sanctions evasion.
Comprehensive rules for the issuance and trading of various types of virtual assets.
More granular classification and regulation of different crypto-asset types (e.g., e-money tokens, asset-referenced tokens, other crypto-assets).
Harmonization with EU standards for market integrity and financial stability.
Role: Regulates virtual assets backed by securities, derivatives, and other types of virtual assets that are not financial instruments or fall under the NBU's jurisdiction. It is responsible for issuing permits/licenses to virtual asset service providers operating with non-financial virtual assets.
Role: While not a direct regulator in terms of licensing, the MDT was instrumental in drafting the Virtual Assets Law and continues to play a leading role in shaping digital asset policy, promoting innovation, and coordinating efforts among various government bodies to develop the virtual asset market in Ukraine.
Law of Ukraine "On Virtual Assets" No. 1852-IX
Adopted by Verkhovna Rada (Parliament): February 17, 2022
Signed into Law by President Zelenskyy: March 16, 2022
Legalizes virtual assets in Ukraine.
Defines the legal status, classification (e.g., secure virtual assets, financial virtual assets), and ownership rights for virtual assets.
Establishes the regulatory framework and allocates oversight responsibilities to the NBU and NSSMC.
Outlines requirements for Virtual Asset Service Providers (VASPs), including crypto exchanges, and aims to introduce a licensing/permit regime.
Legalization: Under the Law "On Virtual Assets," crypto trading and the operation of virtual asset service providers (VASPs), including crypto exchanges, are legal in Ukraine. The law aims to bring them into the legal framework, ensuring transparency and consumer protection.
Regulatory Status for Exchanges: The law mandates that virtual asset service providers (VASPs), which include crypto exchanges, are required to register and obtain permits/licenses from the relevant regulators (NSSMC or NBU, depending on the type of assets handled) to operate legally.
Implementation Status: While the legal framework for licensing and supervision is established by the law, the full implementation of the operational specifics for exchanges (i.e., the detailed licensing procedures, requirements, and supervision rules) is still awaiting the finalization of secondary legislation and by-laws from the NBU and NSSMC.
Wartime Operations: Despite the pending full implementation, many crypto exchanges continue to operate in Ukraine, and virtual assets have played a crucial role in wartime fundraising for the Ukrainian government and various humanitarian efforts. The government has facilitated crypto donations, demonstrating its practical acceptance even while the regulatory environment is still maturing.
AML/KYC Requirements
Law of Ukraine No. 361-IX "On Preventing and Counteracting Legalization (Laundering) of Criminal Proceeds, Terrorist Financing and Financing the Proliferation of Weapons of Mass Destruction" (dated December 6, 2019, with subsequent amendments).
This is the foundational AML/CFT law in Ukraine, bringing the country's framework closer to FATF recommendations and the EU's 4th and 5th AML Directives. It designates "virtual asset service providers" as "reporting entities" (subjects of primary financial monitoring).
Law of Ukraine No. 2074-IX "On Virtual Assets" (dated February 17, 2022).
This law defines virtual assets and virtual asset service providers (VASPs) in Ukraine. While its full implementation regarding licensing and specific regulatory oversight was initially delayed due to martial law, its principles establish the legal framework for virtual assets and clarify the roles of regulatory bodies. It reinforces that VASPs are subject to AML/CFT requirements under Law No. 361-IX.
Safekeeping and/or administration of virtual assets or instruments enabling control over virtual assets.
Participation in and provision of financial services related to an issuer’s offer and/or sale of a virtual asset.
For Individuals: Obtain and verify the customer's identity, including full name, date of birth, place of birth, address, identification number (where applicable), and details of the identity document (series, number, date of issue, issuing authority). Verification must be based on reliable, independent source documents, data, or information.
For Legal Entities: Obtain and verify the legal entity's name, registration number, legal form, legal address, contact details, and identify the management structure.
Beneficial Owner (UBO) Identification: Identify and take reasonable measures to verify the identity of the beneficial owner(s) of the customer. This is crucial for both individuals (e.g., if acting on behalf of another) and legal entities.
Understand the purpose and intended nature of the business relationship or transaction.
Conduct ongoing monitoring of the business relationship and transactions undertaken throughout the course of that relationship to ensure consistency with the VASP's knowledge of the customer, their business, and risk profile. This includes monitoring the source of funds and the destination of virtual assets.
Applied in situations presenting higher risks of money laundering or terrorist financing. This includes, but is not limited to
Customers who are Politically Exposed Persons (PEPs), their family members, or closely associated persons.
Complex, unusually large, or unusual patterns of transactions that have no apparent economic or lawful purpose.
Non-face-to-face business relationships without adequate safeguards.
Transactions above specific thresholds (e.g., equivalent of UAH 400,000 for certain types of operations, though suspicion requires reporting even below this).
May be applied in situations identified as lower risk, but VASPs must still be able to demonstrate that the risk is genuinely lower and maintain sufficient information to identify the customer and beneficial owner. Given the inherent risks associated with virtual assets, SDD is often limited in this sector.
Reporting Thresholds: VASPs must report transactions that meet specific monetary thresholds (e.g., UAH 400,000 or more, approximately EUR 10,000 equivalent) if they have certain characteristics (e.g., complex or unusual transaction, linked to high-risk entities/jurisdictions, involving transfers to/from certain accounts).
Suspicion Regardless of Threshold: Even if a transaction does not meet a monetary threshold, if the VASP suspects or has reasonable grounds to suspect that funds are proceeds of criminal activity or are linked to terrorist financing, it must be reported.
Reporting Authority: All suspicious transaction reports are submitted to the State Financial Monitoring Service of Ukraine (SFMS).
No Tipping Off: VASPs are prohibited from disclosing to the customer or any third party that a suspicious transaction report has been or will be made.
Customer Identification Data: All documents and data obtained during the CDD process (identification documents, verification records, UBO information).
Transaction Records: Records of all transactions, including virtual asset addresses, transaction hashes, amounts, dates, and parties involved.
Business Correspondence: Relevant correspondence concerning the customer relationship.
STRs: Copies of all suspicious transaction reports submitted.
Retention Period: All these records must be retained for at least five years after the termination of the business relationship or the date of an occasional transaction.
Role: The central executive body responsible for developing and implementing state policy in the field of preventing and counteracting money laundering and terrorist financing. All suspicious transaction reports are submitted to the SFMS.
Role: Designated by Law No. 2074-IX as a key regulator for certain types of VASPs, particularly those that engage in activities similar to traditional financial services or payment systems. It will set requirements for financial monitoring, supervision, and licensing for VASPs under its purview.
Role: Designated as a regulator for virtual assets that qualify as "financial instruments" or "securities" under Ukrainian law. It will oversee VASPs dealing with such assets.
Role: Played a leading role in drafting the "On Virtual Assets" law and is generally responsible for developing state policy in the digital assets sector. It may also have oversight regarding technical standards and licensing processes for VASPs.
Exchange between virtual assets and fiat currencies.
Travel Rule
Travel rule data collection in progress.
Tax Reporting
Law of Ukraine "On Virtual Assets" (adopted September 8, 2022, effective December 15, 2022): This law provides a legal framework for virtual assets, defining them, their types, and the regulatory bodies. It legalizes the virtual assets market but did not introduce specific tax rules for virtual assets. It explicitly stated that the taxation of virtual assets should be regulated by amendments to the Tax Code of Ukraine.
Current Interpretation: Profits derived from virtual asset transactions (e.g., selling cryptocurrency for fiat currency, exchanging one cryptocurrency for another at a profit, receiving crypto as payment for services) are generally treated as other investment income or simply other taxable income.
Taxable Event: A taxable event occurs when a gain is realized (e.g., sale, exchange, or use of crypto for goods/services where its value has increased since acquisition).
Total Effective Rate: 19.5% on the realized profit (income minus documented expenses).
Deductible Expenses: The documented cost of acquiring the virtual asset, as well as transaction fees, should generally be deductible from the proceeds to determine the taxable profit.
Mining/Staking Income: Income derived from mining or staking activities would likely be treated as regular income subject to the 19.5% total rate. The taxable amount would be the fair market value of the crypto received at the time of receipt.
Airdrops/Forks: Similar to mining/staking, the fair market value of new tokens received from airdrops or hard forks might be considered taxable income at the time of receipt.
Current Interpretation: Legal entities engaging in virtual asset operations would generally include profits from these operations in their corporate income tax base.
Tax Rate: Corporate Income Tax (CIT): 18% on the taxable profit.
Reporting: Profits and losses from virtual asset transactions would be accounted for according to general accounting principles and reflected in the company's financial statements and corporate income tax declarations.
Accounting: The State Tax Service has not provided specific guidance on accounting for virtual assets. Businesses generally use approaches consistent with international financial reporting standards (IFRS), often treating crypto as intangible assets or inventory depending on the nature of the business.
Ukraine does not have a separate "capital gains tax." Instead, capital gains (including those from virtual assets, under current interpretation) are subject to the standard Personal Income Tax (PIT) for individuals or Corporate Income Tax (CIT) for businesses.
Therefore, the rates are 19.5% for individuals (18% PIT + 1.5% Military Levy) and 18% for businesses.
Ukraine has Value Added Tax (VAT), not GST.
The transfer of virtual assets themselves (buying or selling crypto) is unlikely to be subject to VAT under current law. This aligns with international practice, where virtual assets are often treated as a means of payment or an intangible asset, rather than a supply of goods or services subject to VAT.
Services related to virtual assets (e.g., exchange fees charged by a virtual asset service provider, custodial services, brokerage services) might be subject to VAT (20%) if they qualify as taxable services performed in Ukraine.
Draft Legislation Intent: Past draft tax laws (not yet enacted) proposed specific exemptions from VAT for transactions involving virtual assets, further indicating that the intention is not to apply VAT to the assets themselves.
Individuals are required to file an Annual Property and Income Declaration (Декларація про майновий стан і доходи) if they received income subject to PIT that was not withheld at source or if they received certain types of income (e.g., from foreign sources, investment income).
Income from virtual asset transactions, if profitable, should be reported in this annual declaration. There are no specific forms or lines for virtual assets; it would typically be reported under "other investment income" or "other taxable income."
Deadline: Typically by May 1st of the year following the reporting year.
Legal entities must file standard corporate income tax returns (Декларація з податку на прибуток підприємств) annually, reflecting all income and expenses, including those from virtual asset operations.
Regular financial reporting requirements also apply.
The Law "On Virtual Assets" (2022) laid the regulatory foundation but left the tax specifics to future amendments.
Draft Laws: Several draft laws (e.g., Draft Law No. 7413 in 2022) have been proposed to amend the Tax Code. These drafts typically suggest
A lower PIT rate for investment profit from virtual assets (e.g., 5% + 1.5% military levy, total 6.5%).
Specific rules for determining the tax base (e.g., income minus documented expenses).
Exemption from VAT for transactions involving virtual assets.
State Tax Service of Ukraine (Державна податкова служба України): This is the primary tax authority.
While they may issue general guidance or explanations, specific, detailed guidance on virtual asset taxation is scarce due to the lack of dedicated legislation. Any interpretations would typically be based on general tax principles.
Ministry of Finance of Ukraine (Міністерство фінансів України): Responsible for developing fiscal policy and draft tax legislation.
Verkhovna Rada of Ukraine (Верховна Рада України): The parliament where all laws, including tax laws, are adopted.
Official Laws Portal (Ukrainian): https://zakon.rada.gov.ua/
Custody Requirements
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Stablecoin Regulation
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Securities Classification
Crypto and virtual assets in Ukraine currently lack a comprehensive, dedicated securities-specific regulatory framework; the existing legal architecture regulates traditional securities, and the Law of Ukraine "On Virtual Assets" has been adopted but implementation remains incomplete. About us – НКЦПФР, General Legal Framework | Baker McKenzie
No entity has been licensed under a specific digital asset securities regime, as no such dedicated licensing framework for crypto-asset securities has yet entered into force; licensing currently applies only to traditional securities market activities. Securities issue – НКЦПФР, General Legal Framework | Baker McKenzie
Practical reality: crypto businesses operate in a legal gray zone, with tax and securities treatment unresolved, though the NSSMC is modernizing capital markets regulation in line with EU standards, including new market abuse and disclosure rules effective from 1 January 2026. General Legal Framework | Baker McKenzie
Ukraine is a member of IOSCO since 1996, and the NSSMC is not a signatory to the IOSCO Multilateral Memorandum of Understanding, limiting international cooperation mechanisms.
The National Securities and Stock Market Commission (NSSMC) is the state collegial authority responsible for regulation of the securities market in Ukraine, organized commodity markets, and other capital market instruments. About us – НКЦПФР
The NSSMC adopts legally binding regulatory acts for market participants, licenses professional activities, registers securities issues, and oversees issuers' compliance with disclosure requirements; its website is https://www.nssmc.gov.ua. About us – НКЦПФР
The National Bank of Ukraine (NBU) and the NSSMC share oversight over different groups of financial institutions, with the NBU supervising insurance, leasing, factoring, credit unions, credit bureaus, pawnshops, and other financial companies, while the NSSMC regulates private funds including pension funds, construction financing, and real estate transactions. Who regulates banking and financial services | Baker McKenzie
The State Service of Financial Monitoring is the central body of the executive power acting as the financial intelligence unit, with the NBU and NSSMC acting as additional second-tier agencies for regulatory and oversight functions over initial financial monitoring institutions. Who regulates banking and financial services | Baker McKenzie
The NSSMC conducts prudential and market conduct supervision of professional market participants, carries out inspections and examinations, and detects and suppresses market manipulation and abusive market practices. About us – НКЦПФР
The Civil Code of Ukraine dated 16 January 2003, No. 435-IV and the Law of Ukraine "On Joint Stock Companies" dated 27 July 2022, No. 2465-IX ("JSC Law") provide foundational corporate law rules relevant to securities issuance and takeovers. General Legal Framework | Baker McKenzie
No dedicated law specifically regulating virtual assets as securities has been enacted into force; the draft Law "On the National Commission on Securities and Stock Exchanges" was registered in parliament in February 2021 to strengthen NSSMC independence and institutional capacity.
The NSSMC is guided by the Objectives and Principles of Securities Regulation developed by the International Organization of Securities Commissions (IOSCO) and is a member of IOSCO. About us – НКЦПФР
Ukraine has been a member of IOSCO since 1996.
The NSSMC concludes memoranda of understanding with foreign regulatory authorities, including Germany's BaFin, and participates in alignment of Ukrainian legislation with EU law as part of Ukraine's European integration process. About us – НКЦПФР
The NSSMC issues licenses for types of professional activities in the securities market, including investment firms, asset management companies, and depository institutions. About us – НКЦПФР
Professional capital market participants requiring licensing include investment firms, asset management companies, and depository institutions. About us – НКЦПФР
The NSSMC registers securities issues and prospectuses, and authorizes credit rating agencies. About us – НКЦПФР
The NSSMC has the power to apply enforcement measures and sanctions, including imposing fines, issuing orders to eliminate violations, suspending licenses, and suspending the circulation of securities. About us – НКЦПФР
The NSSMC may strip market participants of licenses required to carry out certain activities in the Ukrainian securities market for non-compliance with securities legislation. General Legal Framework | Baker McKenzie
With limited exceptions, only Ukrainian-licensed securities traders may handle securities transactions.
The establishment of a joint-stock company requires NSSMC registration of share issues, which is a multi-stage process that includes submission of an application and all necessary documents for registration of the share issue through official channels to the NSSMC. Securities issue – НКЦПФР
The NSSMC registers the share issue and issues a temporary certificate of registration of the share issue, and the issuer must conclude an agreement with the Central Securities Depository on servicing securities issues. Securities issue – НКЦПФР
A report on the results of the share issue must be submitted to the NSSMC through official channels, and the NSSMC registers the report on the results of the share issue. Securities issue – НКЦПФР
The procedure for issuing shares when establishing a joint-stock company is determined by the NSSMC. Securities issue – НКЦПФР
The size of the authorized capital of a joint-stock company is increased by raising the nominal value of shares or by an additional issue of shares in accordance with the procedure established by the NSSMC. Securities issue – НКЦПФР
Registration of shares issued by joint-stock companies established and/or transformed from state-owned and municipal enterprises in the process of privatization or corporatization is carried out in accordance with the procedure established by the NSSMC. Securities issue – НКЦПФР
Share consolidation and stock split of a joint-stock company are carried out in accordance with the procedure established by the NSSMC. Securities issue – НКЦПФР
Registration of local government bond issues is carried out by the NSSMC in accordance with the procedure established by it. Securities issue – НКЦПФР
The specifics of issuance and trading of bonds of international financial organizations are specified by the NSSMC. Securities issue – НКЦПФР
Registration of the issue of REF certificates, registration of the issue and approval of an REF certificate prospectus can be carried out subject to the following requirements: the total nominal value of REF certificates issued by an issuer cannot exceed ten times this issuer's equity capital; the amount of REF certificates within the scope of the issue should be equivalent to at least EUR 100,000 at the official exchange rate of the National Bank of Ukraine on the date of the decision to issue REF certificates. Securities issue – НКЦПФР
The placement and/or circulation of securities of Ukrainian issuers outside Ukraine is made solely on the basis of the NSSMC's permission, requiring registration of securities issue and assumption of the same type of securities to stock trading at one of the Ukrainian stock exchanges. Securities issue – НКЦПФР
If the permit relates to the issuance of shares, the number of shares for which placement and circulation outside Ukraine is planned must not exceed 75% of the total number of shares of the respective issue. Securities issue – НКЦПФР
To date, zero entities have been licensed under any specific virtual asset or cryptocurrency securities regime in Ukraine, as no such dedicated licensing framework for digital asset securities has yet been enacted and brought into force. General Legal Framework | Baker McKenzie, Securities issue – НКЦПФР
Ukraine has a two-tier financial monitoring system: (i) initial financial monitoring carried out by banks and non-banking financial institutions (IMIs); and (ii) state-level financial monitoring. Who regulates banking and financial services | Baker McKenzie
The key enforcement role in the second tier belongs to the State Service of Financial Monitoring, which is regarded as a central body of the executive power acting as the financial intelligence unit. Who regulates banking and financial services | Baker McKenzie
The Law of Ukraine "On Prevention and Counteractions of Legalization of Proceeds of Crime, Financing of Terrorism and Circulation of Mass Destruction Weapon" dated 6 December 2019, No. 361-IX ("UBO Law") sets out rules relating to the disclosure of ultimate beneficial owners. General Legal Framework | Baker McKenzie
Both the NBU and the NSSMC, along with other competent authorities, act as additional second-tier agencies that carry out regulatory and oversight functions vis-à-vis the respective IMIs. Who regulates banking and financial services | Baker McKenzie
The Ukrainian government imposed restrictions ranging from a ban on payments and notarial and registration actions for the benefit of entities or individuals with ties to the Russian Federation or Belarus, to forced seizure of assets belonging to the same. General Legal Framework | Baker McKenzie
Ukrainian banks are required to monitor most foreign currency transactions under regulations that continued after the liberalization of currency controls.
The NSSMC cooperates with law enforcement authorities and other regulators to exchange information and coordinate actions aimed at preventing market abuse and combating market manipulation. About us – НКЦПФР
The NSSMC applies enforcement measures and sanctions, including imposing fines, issuing orders to eliminate violations, suspending licenses, and suspending the circulation of securities. About us – НКЦПФР
The NSSMC may apply financial sanctions in the case of non-compliance with the takeover rules. General Legal Framework | Baker McKenzie
Non-compliant actors are subject to criminal liability in the case of gross non-compliance with the securities legislation. General Legal Framework | Baker McKenzie
The NSSMC carries out inspections and examinations, and detects and suppresses market manipulation, abusive market practices, and violations of investors' rights. About us – НКЦПФР
During the 2014-2015 banking crisis cleanup, over 100 banks were closed for insolvency or money laundering activities, demonstrating active enforcement in the broader financial sector.
In fall 2020, Ukraine's Constitutional Court struck down certain provisions of the Law of Ukraine about NABU and the Law on Corruption Prevention, including provisions on e-declarations and on the powers of the National Agency on Corruption Prevention related to their verification, creating obstacles to new disbursements under IMF, World Bank, and EU assistance programs.
Two banks were declared insolvent in 2020 due to non-compliance with capital requirements.
The Constitutional Court is also considering cases challenging the constitutionality of the High Anti-Corruption Court and the Deposit Guarantee Fund, which have been criticized by the government as corruptly influenced.
No tax guidance has been issued for virtual assets in Ukraine; no specific provisions on taxation of cryptocurrency or digital asset securities gains have been published. General Legal Framework | Baker McKenzie, Securities issue – НКЦПФР
The existing legal framework for securities does not distinguish between different tax treatments for digital asset securities versus traditional securities; no specific capital gains, income tax, or VAT rules for virtual assets are referenced. General Legal Framework | Baker McKenzie
Ukraine's capital and commodity markets remain underdeveloped, with liquidity limited and investors having few investment options; government bonds constitute 95 percent of trades on the ten stock exchanges.
The commodity market in Ukraine does not have a transparent regulatory framework.
The NSSMC lacks financial and operational independence, which undermines its ability to operate as a fully effective regulator.
The NSSMC is not a signatory to the IOSCO Multilateral Memorandum of Understanding, limiting international cooperation on enforcement and information exchange.
For many years, Ukrainian capital markets have struggled due to significant gaps and inconsistencies in the regulatory framework.
There is no dedicated securities regulatory framework for virtual assets in force, creating significant legal uncertainty for businesses seeking to issue or trade crypto-asset securities in Ukraine. General Legal Framework | Baker McKenzie
Following the launch of the Russian Federation's invasion of Ukraine on 24 February 2022, a martial law regime has been in effect, prolonged every 3 months, which imposes limitations and special measures that affect the financial system and economy, and investments associated with entities or individuals with ties to Russia or Belarus are effectively banned. General Legal Framework | Baker McKenzie
The new Capital Markets Law provisions effective 1 January 2026 introduce enhanced disclosure requirements for inside information and new regulations on market abuse practices, but these do not specifically address virtual asset securities. General Legal Framework | Baker McKenzie
The practical reality is that crypto businesses face uncertainty regarding whether their activities fall within the scope of existing securities licensing requirements, as only Ukrainian-licensed securities traders may handle securities transactions with limited exceptions.
The NSSMC's ongoing digitalization of regulatory processes is mentioned, but no specific timeline or framework for digital asset securities registration is provided. About us – НКЦПФР
The proposed reform to corporatize state and municipal enterprises by converting them into joint-stock companies is still subject to final legislative procedures, including the President's signature, before entering into force. General Legal Framework | Baker McKenzie
About us – НКЦПФР|НАЦІОНАЛЬНА КОМІСІЯ З ЦІННИХ ПАПЕРІВ ТА ФОНДОВОГО РИНКУ
Securities issue – НКЦПФР|НАЦІОНАЛЬНА КОМІСІЯ З ЦІННИХ ПАПЕРІВ ТА ФОНДОВОГО РИНКУ
General Legal Framework | Ukraine | Global Public M&A Guide | Baker McKenzie Resource Hub
1. Who regulates banking and financial services in your jurisdiction? | Ukraine | Global Financial Services Regulatory Guide | Baker McKenzie Resource Hub
Sanctions & Restrictions
Key Impact on Crypto: OFAC has explicitly targeted cryptocurrency transactions and entities facilitating sanctions evasion, particularly those linked to Russia. It has sanctioned crypto mixers (e.g., Tornado Cash), crypto exchanges (e.g., Garantex, SUEX), and specific individuals involved in facilitating illicit finance.
Sanctioned Entity Screening: Strict obligation to screen all customers (KYC), beneficial owners, and transaction counterparties against the Specially Designated Nationals and Blocked Persons (SDN) List and other OFAC sanctions lists (e.g., Non-SDN Menu-Based Sanctions List - NS-MBS).
Asset Freezes: Any virtual assets owned or controlled by sanctioned persons must be blocked and reported to OFAC.
Prohibited Transactions: Prohibition on engaging in any transactions, directly or indirectly, with sanctioned individuals, entities, or in relation to sanctioned jurisdictions/territories (e.g., Crimea, occupied territories of Ukraine).
Geographic Restrictions: Prohibitions on engaging in certain economic activities within Crimea, Sevastopol, and the occupied territories of Donetsk, Luhansk, Kherson, and Zaporizhzhia regions of Ukraine.
Reporting Obligations: Mandatory reporting of blocked assets and rejected transactions to OFAC.
OFAC Guidance on Virtual Currency: https://home.treasury.gov/policy-issues/financial-sanctions/faqs/virtual-currency (See FAQs specific to virtual currency and sanctions compliance)
Key Impact on Crypto: The EU has specifically included virtual assets in its sanctions packages, treating them as transferable securities or financial assets for the purpose of asset freezes and other restrictions. This includes bans on providing crypto-asset wallet, account, or custody services to Russian persons and residents (with some exceptions).
Sanctioned Entity Screening: Obligation to screen against the EU Consolidated Financial Sanctions List.
Asset Freezes: Freezing of all funds (including virtual assets) belonging to, or owned or controlled by, listed individuals and entities.
Prohibited Transactions: Broad prohibitions on making funds or economic resources available, directly or indirectly, to listed persons.
Restrictions on Crypto Services: Specific prohibitions on providing crypto-asset wallet, account, or custody services to Russian nationals, natural persons residing in Russia, or legal persons/entities established in Russia (with certain thresholds and exceptions for humanitarian purposes or personal use).
Geographic Restrictions: Restrictions on economic activities related to Crimea, Sevastopol, and the non-government controlled areas of Donetsk, Luhansk, Kherson, and Zaporizhzhia.
EU Sanctions Map (Consolidated information): https://www.sanctionsmap.eu/
Council Regulation (EU) No 269/2014: Concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine (as amended): https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:02014R0269-20240315
Council Regulation (EU) No 833/2014: Concerning restrictive measures in view of Russia's actions destabilising the situation in Ukraine (as amended, including crypto-specific measures): https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:02014R0833-20240315
Compliance Requirements for VASPs: VASPs must be aware that UN sanctions lists (e.g., ISIL (Da'esh) & Al-Qaida Sanctions List, 1988 Taliban Sanctions List) are incorporated into national sanctions regimes (like OFAC's SDN List and EU lists).
Key Impact on Crypto: While specific crypto assets may not always be explicitly mentioned, "assets" generally include all forms of property. Ukrainian VASPs and entities must comply with these national sanctions.
Sanctioned Entity Screening: VASPs operating in Ukraine or interacting with Ukrainian entities must screen their customers and transactions against the NSDC Sanctions List.
Decrees of the President of Ukraine on NSDC decisions (official source, mostly in Ukrainian): https://www.president.gov.ua/documents/decrees/search?search=sanctions (Use search function for "sanctions" or specific decree numbers).
The National Sanctions Register of Ukraine (maintained by the National Agency on Corruption Prevention - NACP, includes NSDC data): https://sanctions.nazk.gov.ua/en/
AML/CTF Obligations: The law mandates VASPs to implement robust anti-money laundering and counter-terrorist financing (AML/CTF) procedures, including KYC/CDD, transaction monitoring, and reporting suspicious activities to the State Financial Monitoring Service of Ukraine. These obligations are aligned with FATF Recommendations.
Sanctions Compliance: While not explicitly a "sanctions law," the "On Virtual Assets" law, in conjunction with other Ukrainian legislation, requires VASPs to comply with national and international sanctions, ensuring that their services are not used for sanctioned activities or by sanctioned individuals/entities.
Licensing/Registration: The law provides for future licensing/registration requirements for VASPs, which will include compliance with sanctions as a prerequisite. The National Commission on Securities and Stock Market (NSSMC) is designated as the regulator.
Law of Ukraine "On Virtual Assets" (in Ukrainian): https://zakon.rada.gov.ua/laws/show/2074-IX#Text (Official Verkhovna Rada website)
Real-time & Batch Screening: All new customers and existing customer databases must be screened against relevant sanctions lists (OFAC SDN, EU Consolidated, UN, NSDC). This includes individuals, entities, and wallet addresses where possible.
Ongoing Monitoring: Continuous monitoring of transactions for red flags associated with sanctions evasion (e.g., transactions involving known sanctioned entities, unusual transaction patterns, transactions to/from high-risk jurisdictions or mixers).
Ultimate Beneficial Ownership (UBO) Screening: Identifying and screening the UBOs behind legal entities to ensure they are not sanctioned.
Geographic IP Blocking: Implementing measures to restrict access to services from sanctioned geographies.
OFAC & EU: Prohibit certain economic activities and financial services in
Crimea and Sevastopol (occupied by Russia since 2014)
Occupied territories of Donetsk, Luhansk, Kherson, and Zaporizhzhia regions (occupied by Russia since 2022)
General Sanctions on Russia/Belarus: Many sanctions programs prohibit various types of financial services, exports, and imports to/from Russia and Belarus, impacting any VASP interactions with entities or individuals residing or established in these countries.
Ukraine's Perspective: Ukraine considers all temporarily occupied territories as integral parts of its sovereign territory but imposes its own restrictions on economic activity within these areas to counter the occupation.
Civil Penalties: Can range from hundreds of thousands to millions of dollars per violation, depending on the specific program and severity.
Criminal Penalties: For willful violations, individuals can face substantial fines (up to millions of dollars) and lengthy imprisonment (up to 20-30 years), while corporations can face much larger fines.
Reputational Damage: Significant harm to a VASP's reputation and ability to operate.
Legal Basis: Primarily the International Emergency Economic Powers Act (IEEPA).
Member State Discretion: Penalties for violating EU sanctions are determined by individual member states, but EU directives require them to be "effective, proportionate, and dissuasive."
Common Penalties: Include substantial fines, imprisonment for individuals, and confiscation of assets.
Reputational Damage: Similar to U.S. penalties, significant reputational harm is a major consequence.
Administrative Responsibility: For violations of AML/CTF laws or non-compliance with sanctions, individuals and legal entities can face significant fines.
Article 209 of the Criminal Code of Ukraine (Legalization (Laundering) of Property Obtained by Criminal Means): Imprisonment up to 12 years with confiscation of property.
Article 258-5 (Financing of Terrorism): Imprisonment up to 12 years with confiscation of property.
Other Articles: Criminal liability for actions aimed at undermining Ukraine's territorial integrity, assisting the aggressor state, or violating sanctions can lead to severe penalties, including imprisonment and asset seizure.
Loss of Licenses/Registration: VASPs could have their licenses revoked or applications denied.
Legal Basis: Criminal Code of Ukraine (Кримінальний кодекс України), Code of Administrative Offenses of Ukraine (Кодекс України про адміністративні правопорушення).
Enforcement Actions
Legal Basis: Primarily the International Emergency Economic Powers Act (IEEPA).
Legal Basis: Criminal Code of Ukraine (Кримінальний кодекс України), Code of Administrative Offenses of Ukraine (Кодекс України про адміністративні правопорушення).
Research & Articles
Regulatory Forecast
high confidenceLikely enforcement action expected around 2026-10-23
Based on 73 historical regulatory events for Ukraine, averaging every 103 days, with increasing regulatory activity.
Recent Updates
National Bank of Ukraine (NBU - НБУ): Regulates virtual assets secured by monetary values.
National Bank of Ukraine (NBU - НБУ): Regulates virtual assets secured by monetary values.
Definition of VASP: Article 1 of the Law defines a "Virtual Asset Service Provider" (VASP) as a legal entity that...
Definition of VASP: Article 1 of the Law defines a "Virtual Asset Service Provider" (VASP) as a legal entity that, as part of its business activities, performs one or more of the following services for or on behalf of another natural or legal person:
The Law "On Virtual Assets" (Article 16, Part 2, Point 2) requires VASPs to ensure the reliable and safe storage of...
The Law "On Virtual Assets" (Article 16, Part 2, Point 2) requires VASPs to ensure the reliable and safe storage of virtual assets and/or instruments enabling control over them. While the law doesn't explicitly use the term "segregation" in the same way traditional finance does for client funds (e.g., separate bank accounts), the underlying principle of protecting client assets is implied through:
Ukraine's legislation defines a Virtual Asset Service Provider (VASP) that provides "safekeeping and/or administr...
Ukraine's legislation defines a Virtual Asset Service Provider (VASP) that provides "safekeeping and/or administration of virtual assets or instruments enabling control over virtual assets" as a custodian.
Define virtual assets and their legal status.
Define virtual assets and their legal status.
National Bank of Ukraine (NBU): Responsible for the regulation of virtual assets secured by currency (fiat-backed...
National Bank of Ukraine (NBU): Responsible for the regulation of virtual assets secured by currency (fiat-backed stablecoins) and for payment services involving virtual assets.
As of late 2023/early 2024, this secondary legislation has not yet been fully adopted, meaning the actual process f...
As of late 2023/early 2024, this secondary legislation has not yet been fully adopted, meaning the actual process for obtaining a license is largely suspended or not fully operational. The focus of the government has been on wartime priorities.
Currently, the exact, officially finalized capital requirements are pending the adoption of secondary legislation.
Currently, the exact, officially finalized capital requirements are pending the adoption of secondary legislation.
These are indicative figures from drafts and should be verified once official regulations are published.
These are indicative figures from drafts and should be verified once official regulations are published.
Increased AML/CFT Scrutiny: Due to the war and sanctions, there is heightened scrutiny on financial flows, includ...
Increased AML/CFT Scrutiny: Due to the war and sanctions, there is heightened scrutiny on financial flows, including virtual assets, to prevent their use for illicit purposes or sanctions evasion.
The economic purpose of the token: Is it issued primarily for investment purposes with an expectation of profit f...
The economic purpose of the token: Is it issued primarily for investment purposes with an expectation of profit from the efforts of others, rather than solely for utility within a specific network or access to a product/service?
Stablecoins: Under the Law "On Virtual Assets," stablecoins (which aim to maintain a stable value relative to a f...
Stablecoins: Under the Law "On Virtual Assets," stablecoins (which aim to maintain a stable value relative to a fiat currency or other asset) are regulated by the National Bank of Ukraine (NBU), rather than NCSSM as securities, provided they meet specific criteria.
Take administrative actions: Such as imposing fines, ordering the cessation of activities, or referring cases for...
Take administrative actions: Such as imposing fines, ordering the cessation of activities, or referring cases for criminal investigation if violations of securities law are found (e.g., offering security tokens without a prospectus or proper registration).
Cooperate with law enforcement: In cases of fraud or other serious violations involving virtual assets deemed sec...
Cooperate with law enforcement: In cases of fraud or other serious violations involving virtual assets deemed securities.
National Bank of Ukraine (NBU): Responsible for regulating virtual assets that are secured by currency values (e....
National Bank of Ukraine (NBU): Responsible for regulating virtual assets that are secured by currency values (e.g., fiat-pegged stablecoins) and for supervising virtual asset service providers (VASPs) that provide services with such assets. It also oversees payment services and electronic money.
"Secured Virtual Assets" (Забезпечені віртуальні активи): This is the category most relevant to stablecoins. A "s...
"Secured Virtual Assets" (Забезпечені віртуальні активи): This is the category most relevant to stablecoins. A "secured virtual asset" is defined as a virtual asset that is secured by a certain object (money, other virtual assets, certain property rights, etc.).
Payment Tokens: The Law "On Payment Services" defines "payment instruments" and "payment tokens," but virtual ass...
Payment Tokens: The Law "On Payment Services" defines "payment instruments" and "payment tokens," but virtual assets (including stablecoins) are not directly classified as electronic money or payment tokens under this law. Instead, they are a separate class of "secured virtual asset" with potential payment functionality, regulated specifically under the "On Virtual Assets" law, with the NBU overseeing their use in payments.
The Law "On Virtual Assets" introduces a licensing regime for Virtual Asset Service Providers (VASPs). This inclu...
The Law "On Virtual Assets" introduces a licensing regime for Virtual Asset Service Providers (VASPs). This includes entities that issue virtual assets (including stablecoins), facilitate their exchange, transfer, storage, or provide other related services.
National Bank of Ukraine's e-Hryvnia Project: The NBU has been actively researching and piloting a central bank d...
National Bank of Ukraine's e-Hryvnia Project: The NBU has been actively researching and piloting a central bank digital currency (CBDC), the e-hryvnia. This is a high priority for the NBU as part of its payment system modernization efforts.
Distinct from Stablecoins: The e-hryvnia is a direct liability of the NBU, representing digital fiat currency. It...
Distinct from Stablecoins: The e-hryvnia is a direct liability of the NBU, representing digital fiat currency. It is fundamentally different from private stablecoins, which are issued by private entities and backed by reserves.
The Law "On Virtual Assets" itself does not directly regulate the CBDC, as the CBDC is a form of state-issued money, ...
The Law "On Virtual Assets" itself does not directly regulate the CBDC, as the CBDC is a form of state-issued money, not a virtual asset as defined by the law.
Defines the legal status, classification (e.g., secure virtual assets, financial virtual assets), and ownership right...
Defines the legal status, classification (e.g., secure virtual assets, financial virtual assets), and ownership rights for virtual assets.
Establishes the regulatory framework and allocates oversight responsibilities to the NBU and NSSMC.
Establishes the regulatory framework and allocates oversight responsibilities to the NBU and NSSMC.
Draft Legislation Intent: Past draft tax laws (not yet enacted) proposed specific exemptions from VAT for transac...
Draft Legislation Intent: Past draft tax laws (not yet enacted) proposed specific exemptions from VAT for transactions involving virtual assets, further indicating that the intention is not to apply VAT to the assets themselves.
As mentioned, Ukraine does not yet have adopted and enacted crypto-specific tax legislation integrated into the T...
As mentioned, Ukraine does not yet have adopted and enacted crypto-specific tax legislation integrated into the Tax Code.
The Law "On Virtual Assets" (2022) laid the regulatory foundation but left the tax specifics to future amendments.
The Law "On Virtual Assets" (2022) laid the regulatory foundation but left the tax specifics to future amendments.
Regulatory Guidance: The National Bank of Ukraine (NBU) and the State Financial Monitoring Service of Ukraine (SF...
Regulatory Guidance: The National Bank of Ukraine (NBU) and the State Financial Monitoring Service of Ukraine (SFMS) are the key regulators for AML/CFT. While specific technical standards for Travel Rule protocols haven't been mandated by law, they may issue sub-regulatory guidance, recommendations, or best practices over time to ensure compliance. VASPs are generally expected to use robust, secure, and interoperable solutions.
Fines: Significant monetary penalties for both the legal entity and responsible officers.
Fines: Significant monetary penalties for both the legal entity and responsible officers.
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