Ukraine Aims to Legalize Crypto by Early 2025

Ukraine is moving towards legalizing crypto by early 2025, adopting a securities-based tax model for profits from digital assets when converted to fiat.

According to Ukrainska Pravda, Ukraine is preparing a bill to legalize cryptocurrencies, which is expected to be adopted in the first quarter of 2025.

The Kyiv government-aligned newspaper also reported that a team of members working in parliament, in collaboration with the National Bank of Ukraine and the International Monetary Fund (IMF), is close to finalizing the relevant draft.

Danylo Hetmantsev, chairman of the Ukrainian Parliament's Financial, Tax and Customs Policy Committee, confirmed that the draft law is almost ready for its first reading and expressed optimism that it will be adopted in early 2025.

“We aim to pass this law and legalize cryptocurrencies in the first quarter,” he said.

The bill not only paves the way for crypto legalization, but also stipulates that digital assets will be taxed. Similar to securities, crypto profits will only be taxed when converted to fiat, a move aimed at curbing tax evasion.

Based on consultations with European experts and the IMF, Ukraine said it is taking a cautious approach to tax exemptions for crypto, as it could lead to tax evasion risks in traditional markets.

In November 2023, the Ukrainian parliament received a draft law that would tax virtual asset transactions, marking a major step towards full crypto legalization. The new law aims to establish clear regulations for exchanges, traders/investors, and create a more stable and secure legal framework for the country's digital asset sector.

Interestingly, Ukrainian state officials are known to hold large amounts of crypto in their 2021 asset declarations. Several officials reported owning 46,351 Bitcoins, worth $2.7 billion at the time. Notably, the 19-year-old son of two members of parliament reported owning $24.6 million worth of Monero (XMR).