Crypto enthusiasts in Ukraine have always been a bit optimistic. "No taxation, no regulations, true freedom!" they thought until the government started looking closely at their transactions. Now the situation reminds us: if you want to make money from crypto, take care of a lawyer and a tax consultant.

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The law on "virtual assets": what is it anyway?

In 2023, Ukraine finally passed a law on virtual assets. Apparently everything is fine: now the crypt is legal! But then the main question appeared — how does it work?

1. Licensing. If you want to create your own exchange or crypto project, prepare money for a license. But only after the end of the war.

2. Taxation. Income from crypto is equal to other investments. This means that 18% personal income tax and 1.5% military tax are now your new friends. Sold BTC? Get ready to give away almost a fifth.

3. Transparency. Ukraine is implementing European AML (anti-money laundering) regulations. All your transactions, if you work through banks or licensed exchanges, can now become part of a large database.

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Do you want to avoid problems? Get ready for challenges

Ukrainians have always found ways to bypass the bureaucracy. But with crypto, it gets more complicated. Banks scrutinize every large transfer. For example:

Selling USDT for 100,000 hryvnias? Expect a call from the bank with the question: "What is this?"

Withdraw cash after selling BTC? Don't be surprised if the tax office asks for an "income statement".

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Are there any advantages?

And now about the good.

1. Ukraine is one of the leaders in the use of crypto. Back in 2021, Chainalysis named Ukraine one of the most active countries in the world in terms of the number of crypto operations. And it hasn't changed.

2. Integration of crypto into the economy. Crypt fundraising became important during the war. Ukrainian projects, such as the Aid for Ukraine fund, were able to attract millions of dollars.

3. DeFi support. Ukrainian developers create and support many popular DeFi platforms that receive global recognition.

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What to do next?

Declare your assets. Yes, it's annoying, but it's better than getting in trouble with the law.

Don't neglect KYC. Use only verified exchanges, even if it is a little more expensive.

Follow the news. Legislation changes very quickly, and new rules can unexpectedly affect your operations.

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Visnovok

Ukraine remains an interesting location for the cryptocurrency world, but the era of the "wild west" is coming to an end. If you want to stay in the game, you will have to accept new rules. Or… move to a country where the government doesn't know what blockchain is. But let's be honest: there are fewer and fewer such places.