How exchanges can legally exchange cryptocurrency in Ukraine

The regulation of cryptocurrencies in Ukraine began with a "prohibitive" law.

The adoption of the law can be attributed to historical events, since Ukraine became the first in the CIS to legalise the terminology of the cryptocurrency industry.

Providers of services related to the circulation of virtual assets include any individual or legal entity that exchanges, transfers or stores virtual assets for another individual or legal entity, providing services related to the sale of virtual assets.

Providers of virtual assets (crypto exchanges and cryptocurrency exchange services) will be the first link in verifying the legitimacy of transactions. The depth of verification will depend on the amount of the transaction (taking into account the threshold amounts of UAH 30,000 and UAH 400,000).

If money laundering or terrorist financing is suspected, the subject of primary financial monitoring is obliged to report this to the state and block suspicious movements of funds.

For transactions in the amount of UAH 30,000 or more, the ultimate beneficiary of the sender and recipient is verified, the ultimate goal of the transfer and the nature of the business relationship are determined.

When checking transactions for an amount less than UAH 30,000, data is collected only about the sender's public key. If the payment is international, the beneficiary's key will also be tracked.

When carrying out transactions for amounts over UAH 400,000, service providers will be required to transfer information to law enforcement agencies if the recipient of funds is a person registered in a country that is on the FATF black list, or a political figure; and also if the money is transferred abroad or using cash.

If the crypto exchange does not take measures to block such transactions, then sanctions may be applied against it as a legal entity.