Author: Staff

Ukraine, a pioneer in the adoption of cryptocurrencies in the region, now intends to emulate the European Union, the world’s pioneer in the regulation of cryptocurrencies.  According to statements made in Kyiv, the new EU standards will be incorporated into the legal system of Ukraine.

The Markets in Crypto Assets (MiCA) package received final parliamentary approval on Thursday. The crypto space is being regulated in this way for the first time in history. It introduces licensing for cryptocurrency service providers as well as safeguards for investor safety.

Yuriy Boyko, a member of the National Securities and Stock Market Commission of Ukraine (NSSMC) states, “This is a truly historic event, I am sure Ukraine will be one of the first countries to implement this regulation into national legislation,” 

Boyko added that the necessary draft provisions are almost complete and that officials will soon begin negotiations with the key players. He emphasized that “the MiCA regulation was taken as the basis” and that “the NSSMC, together with its partners, is actively working on the launch of the virtual assets market in Ukraine.”

Yaroslav Zheleznyak, a member of Ukraine’s parliament, expressed his excitement about the regulatory development on Telegram and stated, “Together with our colleagues from the NSSMC, we are already working on the implementation of some of the MiCA provisions so that crypto assets are legal in Ukraine as well.”

In September 2021, lawmakers in the EU candidate country of Ukraine passed a draft law titled “On Virtual Assets,” but President Volodymyr Zelenskyy sent it back, ordered revisions, and it was passed once more in February 2022 before he signed it into law. Following the Verkhovna Rada’s approval of the necessary Tax Code amendments, it should go into effect.

The Lviv Office of the State Tax Service of Ukraine has taken matters into its own hands and clarified the taxation of crypto-related income for private individuals, despite the fact that the country has not yet implemented crypto tax regulations. The regional tax administration stated in a notice released this month that “Income received by an individual from the sale of cryptocurrencies is included in the total annual taxable income.”

The European Parliament has voted through landmark legislation on cryptocurrency, which will bring new industry rules across the 27-country bloc. 

In a vote on Thursday, Markets in Crypto Assets (MiCA) passed with 517 votes in favor and 38 against, with 18 abstentions. 

Crypto firms including Binance, Coinbase, and Kraken welcomed the passing of the landmark legislation. Additionally, Stefan Berger, the MEP who led the bill’s creation, said in a statement that Europe is now the first continent with comprehensive regulation for crypto assets.

“In order for new coins to be approved in the EU, it must be ensured in the future that their business model will not endanger our currency stability. The new supervisory structures will also be a bulwark against Lehman Brothers moments like the crypto exchange FTX,” he said.

The MiCA legislation means that the EU will have a unified approach to crypto asset regulation across all 27 member states, making it possible for firms approved in one country to passport their business into others with minimal additional paperwork.

But to achieve initial approval, firms will face much higher standards of disclosure, including the preparation of a detailed white paper for each asset offered. Stablecoin issuers, meanwhile, are subject to even tighter rules, including holding sufficient cash to back up customer funds.

MiCA will also ask crypto firms to report the environmental impact of their activities, in a compromise measure after lawmakers removed an all-out ban on the proof-of-work mechanism from an earlier draft.

While concerns have been raised about the possible administrative burden of MiCA on small firms, many crypto companies have welcomed the European Union’s recognition of the industry.

Tom Duff Gordon, Vice President of International Policy at Coinbase said, “The European Parliament’s adoption of MiCA today is a pivotal moment for the crypto industry in the region, and the work of European policymakers should be seen as exemplary,”

“The region is recognizing the potential and societal promise that emerging technology can provide. The EU is stepping up to the mark, while other notable jurisdictions are struggling to provide a solid, cohesive regulatory framework that gives clarity to a burgeoning innovative industry,” he added.

MiCA will not come into effect immediately. Once it has been approved by the European Council, it can be officially made EU law. The EU’s securities regulator, the ESMA, will then produce guidance on the details of how the regulation should be applied.

There is some breathing room for both companies and member states to catch up to the regulation, with rules coming into force on stablecoins in July 2024, while other requirements will not be enforced until January 2025.

In a decision regarding the now-defunct cryptocurrency exchange Gatecoin, a Hong Kong-based court recognized cryptocurrencies as being property that can be held in trust.

In an analysis of the ruling published by the law firm Hogan Lovells, Judge Linda Chan reportedly said that crypto has property attributes. The court also deemed that it was appropriate to follow reasoning applied by other jurisdictions that crypto was property and could form the subject matter of trust.

 Chan noted, “Like other common law jurisdictions, our definition of ‘property’ is an inclusive one and intended to have a wide meaning.“

According to Hogan Lovells, the new ruling can potentially give insolvency practitioners in Hong Kong greater clarity in terms of digital assets. Confirming that crypto constitutes property similar to other assets like stocks aligns Hong Kong with other jurisdictions.

The case involves Gatecoin, a Hong-Kong based crypto exchange that suffered a hack back in 2016, losing around $2 million in digital assets. On March 2019, the exchange announced that it had received a mandatory liquidation order from a Hong Kong court. 

As Hong Kong pushes its goal of becoming a global crypto hub, China’s state-affiliated banks are taking the opportunity to build partnerships and onboarding regulated crypto firms in Hong Kong. The events unfolded despite a ban on crypto-related activities in China.

Many countries have been rethinking the currency or method of payment for cross-border transactions. On the one hand, many of them want to lessen the role the dollar plays in international trade. On the other hand, several countries are starting to accept cryptocurrency as payment.

Russia is one such country that is moving forward in the latter direction. A recent report revealed that the Central Bank is weighing in on the possibility of using digital currencies like crypto for international settlements. In fact, a draft law is already being prepared.

At an event with representatives of the New People party, the Chairman of the Central Bank, Elvira Nabiullina recently revealed that the regulator can use digital assets for settlements with foreign entities. Such operations will be reportedly feasible within the framework of the experiment. 

As noted by Nabiullina, the central bank opposes the use of crypto within the state. However, such funds can be used for external payments. This likely means that special institutions will be created in Russia that will engage in mining and crypto transfer to foreign structures. Such organizations will also be reportedly engaged in operations with other digital finance. 

The Central Bank is concurrently discussing which institutions can be permitted to do the same with the government. According to the article, a state business will likely be given control of these institutions initially. Private businesses will be included in the picture going forward.

Russia is also in favor of internationalizing the Chinese yuan. In a recent speech, Putin alleged that around two-thirds of the trade between Russia and China happens with the yuan and ruble. The president went on to state that his country is in favor of using the yuan in settlements between Russia and the countries of Asia, Africa, and Latin America.

Alongside, Russia has also been making strides on the CBDC front. Russian banks are expected to start testing the digital ruble CBDC on customers soon. The process will begin after the regulatory framework is adopted by the end of April-May.

The police service of Calgary, the largest city in the western Canadian province of Alberta and the largest metro area within the three Prairie Provinces region, announced recently that it is creating a Cryptocurrency Investigations Centre. 

The announcement stated, “The Calgary Police Service is entering into a unique partnership with Chainalysis, a global blockchain data platform, to help combat crypto-crime.”

The police further stated, “The creation and implementation of the Western Canada Cryptocurrency Investigations Centre will strengthen our ability to ensure the public safety of citizens, allow for proactive policing, enhance technical investigative skills, and provide expert training resources for law enforcement.” 

According to the announcement, Calgarians reported losses totaling $13.9 million due to cryptocurrency-related crimes to the police last year, and an additional $3.2 million has been reported so far this year.

“Cybercrimes, particularly cryptocurrency scams, can be difficult for law enforcement to fully investigate due to a variety of complex factors, including various international locations and jurisdictions, sophisticated criminal techniques and quickly advancing technology,” the police explained.

Furthermore, the Canadian Police announced, “Together, with Chainalysis, the Calgary Police Service Cyber Forensics Unit has created the CPS Blockchain Investigation Team (BIT), dedicated to supporting cryptocurrency and blockchain-related investigations.”

According to Chainalysis, the new center is an innovative regional center that will enable law enforcement to tackle crime that takes place using blockchain technology.

The blockchain firm’s research indicates that there has been a significant surge in the usage and adoption of cryptocurrencies and digital assets in Canada since 2019. In 2022, Canada ranked 22nd on the firm’s Global Crypto Adoption Index, which is an improvement from 26th in 2021 and 24th in 2020.