Ukraine’s Response to FATF Standards
Ukraine has officially announced its commitment to implementing the cryptocurrency standards set by the Financial Action Task Force (FATF). The decision comes as the country seeks to align itself with international norms and avoid potential inclusion on the FATF grey list.
Yulia Parkhomenko’s Statement
Yulia Parkhomenko, the Director of the Virtual Assets Department at the Ministry of Digital Transformation of Ukraine, conveyed the decision in a Facebook post on December 11, 2023. Parkhomenko emphasized the crucial role of financial monitoring in the fight against terrorism and money laundering.
Risks of Grey Listing
Parkhomenko highlighted the risks associated with non-compliance, stating that failing to adhere to FATF recommendations could lead to Ukraine and its businesses being placed on the FATF grey or black list. This could have severe implications for the country’s financial reputation on the global stage.
Regulatory Gaps in Current Law
One of the challenges Ukraine faces is the lack of a comprehensive legal framework for cryptocurrencies. The existing law does not cover virtual assets, leaving crypto exchanges operating in the country unregulated. Parkhomenko stressed the need for effective regulation to prevent the market from operating in the shadows.
Draft Law No. 10225-1
To address the regulatory gaps, Ukraine is considering the adoption of draft law No. 10225-1, currently under review by the Ukrainian Parliament. The proposed legislation aims to establish a comprehensive regulatory framework for cryptocurrencies, requiring exchanges to register, conduct due diligence, and report suspicious transactions.
Creating Conditions for Crypto Businesses
According to Parkhomenko, the regulatory norms outlined in the draft law can provide the necessary conditions for the operation of crypto businesses in Ukraine. The proposed regulations would not only bring legitimacy to the market but also enhance financial transparency and security.
Ukraine’s decision to embrace FATF standards and work towards comprehensive cryptocurrency regulation reflects a proactive approach to international financial standards. The pending legislation, if approved, could pave the way for a regulated and transparent crypto market in Ukraine, addressing concerns related to money laundering and terrorism financing.