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What does the law regulate?
The law brings the circulation of virtual assets into the legal plane. They are divided into:
Unsecured IA (classic cryptocurrencies like Bitcoin and Ethereum);
secured IA (security tokens, which give the right to the profit or/and the company’s assets);
Financial WA, secured by financial instruments (tokenized shares) and currency values (stabelcoins and CBDC).
Secured IAs, as opposed to cryptocurrencies, certify property rights, in particular the rights of claim on other objects of civil rights.
“Cryptocurrencies according to the classification of the law refer to unsecured virtual assets. They are characterized by the lack of security by a property or non-property right. This means that no one promises anything for any cryptocurrency, it is an independent unit of the market,” explained Artem Afian, a member of the Ukrainian Virtual Assets Public Union (VAU) and managing partner of Juscutum law firm.
The DeFi and NFT segment is not directly affected by the law, but the broad interpretation of the terminology allows them to be regulated.
“The FATF recommendations on DeFi and NFT were not published until October 2021, and we have not yet had time to implement them in the regulations of this law. However, the term “virtual asset” is formulated abstractly enough to cover all types of VA, “- said the head of the supervisory board of VAU and inter-faction association of people’s deputies of Ukraine Blockchain4Ukraine Alexei Zhmerenetsky.
The only inconsistency he pointed out: if the administrator of DeFi can not be identified, it is not clear who should implement the rules of law.

“One of the challenges for the legislature is determining the ownership of an NFT for its holder. On blockchain, the holder of a token is defined as its unique owner, and the legal system does not enshrine this in any way. At the moment we have developed and registered the draft amendments to the Civil Code of Ukraine, which should partially solve this problem”, – added Zhmerenetsky.
Konstantin Yarmolenko, Director General of the UBA, head of the advisory group of the Blockchain4Ukraine inter-faction association of people’s deputies of Ukraine, specified that the law concerns only legal entities that provide services in the sphere of UBA:

“If you as a natural person send crypto to another natural person or just hold crypto as an investor, the norms of this law don’t concern you and you can sleep peacefully”.
Providers can hold/manage VA, conduct exchanges and transfers of such assets, and provide intermediary services related to them.
If a foreign company meets the criteria of a VA provider and provides services to residents of Ukraine, it is required to register its activities in the country.
“If a resident of Ukraine simply conducts transactions with some foreign VA, that foreign issuer is not required to register as a VA provider in the country,” Yarmolenko clarified.
The sanctions provided by the law will be applied to violators only after three months from the date of implementation of the state register of providers of VA-related services.

“Given that it takes time to develop and launch a registry, VA users and potential VA providers will have the necessary time to adjust. It is not possible to apply sanctions under this law before these sanctions come into force,” explained Konstantin Yarmolenko.

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