The Ukrainian government has approved the final draft of a money laundering law that will handle virtual assets and virtual asset service providers (VASPs) per FATF guidelines. On Dec 6, Ukraine’s lawmaking body, the Rada published a final version of the law. The final version considers virtual assets to be a store for wealth while also recognizing its potential use in financial crimes. There have been a lot of concerns over virtual currencies potential use in money laundering, fraud, and the financing of terror groups.
The new law also includes guidelines on how the government intends to monitor and regulate the trading of cryptos. One of the guidelines talks about how the government will focus on individual transactions worth less than 30,000 hryvnya ($1,300). Such transactions will only have the government monitoring the public key of the sender for financial monitoring purposes. Transactions that exceed that amount will attract scrutiny of both the sender and receiver. The process will include identity verification as well as the verification of the nature of the business relationship.
The threshold for only sender key scrutiny for VASPs stands at 40,000 hryvnya ($1,600). They also have to furnish authorities with information about traders registered from jurisdictions that don’t comply with anti-money laundering recommendations. The country is very keen to make the regulatory environment for crypto-currencies very clear. This was evidenced by a partnership secured with Binance in which the firm would help the authorities craft crypto-related legislation. This was sealed when Binance signed a memorandum of understanding with the ministry of digital transformation of Ukraine.
According to Binance CEO Changpeng Zhao, the legalization of crypto-currencies and the passing of progressive legislation can help that industry grow and attract investors. Part of the agreement stipulates that the ministry and Binance will form a working group focused on the strategy of Blockchain implementations as well as the creation of “new virtual assets and virtual currencies market in Ukraine”