Ukrainian crypto businesses have created 25 digital coins in 2017 and 2018, raising more than $132 million through token sales, according to a new report. Cryptocurrencies are gaining popularity in the country, where the daily trading volume now reaches $1.9 million USD. The growing number of crypto users served by local exchanges has prompted calls for clear but light regulations.
Also read: Ukraine’s Securities Commission Chief Seeks Legalization of Cryptocurrencies as Financial Instruments
3 Exchanges, 4,000 Traders
Over the past year and a half, Ukraine-based companies have attracted more than $132 million through Initial Coin Offerings (ICOs), when traditional IPOs (Initial Public Offerings) have made 0 dollars. This according to Ukrainian deputy Alexei Mushak, who took part in the presentation of a new report titled “Green Book: Cryptocurrency Market Regulation.” The legislator believes that it’s time for Ukraine to introduce light regulation to the industry, or crypto businesses will choose other countries like Malta, Gibraltar, Estonia, and even Belarus.
The authors of the study, associates at the BRDO (Better Regulation Delivery Office) analytical center, have tried to calculate the crypto turnover in various segments of the sector and determine the degree of state intervention needed for its further growth, Mind reports. The researchers have focused on market participants such as issuers of tokens, crypto exchanges, other online and offline traders, crypto miners.
Fifteen ICOs have been conducted in 2017 and the first half of 2018, the released document revealed. The total capital raised in the token sales amounts to $132.7 million. Dream Team ($38 million), Rentberry ($30 million) and Dmarket ($10.5 million) are the top three projects. Eight other ICOs have not disclosed the amount of the capital they have collected. Ukrainian businesses have so far created 25 cryptocurrencies, according to Financial Club.
The yearly crypto mining turnover in Ukraine exceeds $100 million dollars, the compiled data shows. There have been attempts to add mining to the country’s register of economic activities. In March, Ukraine’s economy minister ordered several government agencies and the National Bank to prepare the necessary documents to do so.
Ukrainians in the Top 10 of Crypto Users
The “Green Book” claims that Ukraine is among the top 10 countries in the world in terms of number of cryptocurrency users. The daily volumes of trading digital coins with Ukrainian hryvnia reaches $ 1.9 million. Three exchanges are currently operating locally – Exmo, Kuna and BTC Trade UA. Eighteen other trading platforms and more than 4,000 individual traders are also providing exchange services, both online and offline.
According to Alexander Kubrakov, Head of IT at BRDO, the government in Kiev is ignoring the crypto sector which exist de facto, but not de jure. Three bills have been introduced in Ukraine’s parliament since October – the draft law “On the Circulation of Cryptocurrency in Ukraine”, the bill “On Stimulating the Market of Cryptocurrencies and Their Derivatives”, and a supplementary draft amending the tax code to regulate taxation of crypto incomes and profits. No real progress has been made towards their adoption yet.
The BRDO experts propose gradual introduction of regulations. They think most outstanding issues can be resolved by regulators. On the first stage, the Ministry of Finance and the State Fiscal Service can issue clarification notices to define cryptocurrency as an intangible asset, and the State Service of Special Communication and Information Protection can declare mining a license-free activity.
On the second stage, the law “On the Prevention of Money Laundering” can be amended to integrate the concepts of “virtual currencies.” The analysts also believe that changes are necessary to identify the providers of exchange services for financial monitoring purposes. Currently, Ukrainian exchanges experience huge problems with bank accounts, and crypto traders can’t rely on clear guidelines regarding taxation.
The speakers at the presentation noted that if the lack of regulation initially benefited the crypto sector in Ukraine, now it is actually holding it back. The official government position is very important for its further development, they emphasized. According to Maxim Libanov, member of the National Securities and Stock Market Commission, the era of the gray market is already ending. “We see that the majority of market participants are no longer satisfied with this situation of legal uncertainty,” the official said.
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