Ukraine has marked another milestone towards the path of crypto regulation, with the country’s proposed draft bill passing its first parliamentary hearing this week. This was the document’s initial debut in the Verkhovna Rada parliament and was passed by an overwhelming 240 votes out of the possible 340. It is now set for a second hearing before the final one, after which it may be adopted as law.

Notably, Ukraine has been making significant efforts to support its growing crypto industry. The country might soon join a short-list of jurisdictions that have already implemented crypto regulations. Unsurprisingly, this Eastern European country was named by crypto intelligence firm Chainalysis as one of the leading countries in crypto adoption.

This proposed crypto legislation expounds on fundamental operational pillars within the nascent industry; it also presents an oversight approach by its Ministry of Digital Transformation.

For starters, the draft bill seeks to recognize crypto assets as ‘a set of data in electronic form that can be an independent object of civil transactions, as well as certify property or non-property rights.’ Ideally, virtual assets will not be considered as legal tender in Ukraine if the bill is adopted into law.

Other than the detailed definitions to distinguish virtual assets, the bill further singles out digital assets backed by other goods or services. According to the draft bill, this particular class of crypto assets must be taken out of circulation when the underlying ceases to exist.

On the issue of ownership, virtual assets will be deemed to belong to the party that holds the private keys, except for custodial situations and illegal proceeds or those forfeited through a judicial process. Virtual Asset providers also have to be registered and comply with Ukraine’s KYC/AML & data protection stipulations.

While some stakeholders believe that crypto should not be regulated, Ukraine’s move to join the legally advanced crypto jurisdictions might be a reprieve for its locals. The country has previously been a victim of sudden crypto service halts by big players like Bittrex, who cited uncertain regulatory conditions. Ukraine’s Ministry of Digital Transformation is optimistic that clear regulatory frameworks will encourage crypto growth both locally and internationally.

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