Ukraine to regulate crypto with FATF requirements

Ukraine will implement FATF’s requirements on crypto in a bid to avoid inclusion on the grey list.

Yulia Parkhomenko, Director of the Virtual Assets Department at the Ministry of Digital Transformation of Ukraine, said in a Facebook post on Dec. 11, 2023, that the country will implement crypto standards developed by the Financial Action Task Force (FATF) in order to comply with international standards.

Parkhomenko explained that financial monitoring is essential to combating terrorism and money laundering, noting that Ukraine is risking being placed on FATF’s grey list should the country fail to comply with international rules.

“If we do not comply with FATF recommendations, there is a risk that Ukraine and Ukrainian businesses will be placed on the FATF gray or black list.”

Yulia Parkhomenko

Parkhomenko pointed out that the current law does not apply to cryptocurrencies because Ukraine does not yet have a comprehensive law regulating them. As a result, the activities of crypto exchanges in the country are not regulated.

“The implementation of financial monitoring of operations with virtual assets is possible only if the new market is adequately regulated. If ineffective regulation is introduced, there is a risk that the market will not launch — service providers [crypto exchanges] will not register in our jurisdiction or will continue to operate in the shadows.”

Yulia Parkhomenko

According to the Ukrainian official, the regulatory norms defined in the draft law No. 10225-1 can create all the necessary conditions for the operation of crypto businesses in Ukraine.

The draft law No. 10225-1, which is currently under consideration by the Ukrainian Parliament (Verkhovna Rada), is expected to create a comprehensive regulatory framework for cryptocurrencies. It would require crypto exchanges to register with the government, conduct customer due diligence, and report suspicious transactions.