BRDO launches a review of the cryptocurrency market

19-03-2018

The total cryptocurrency market capitalization amounted to $370 billion as of March 13, 2018. The daily cryptocurrency trading volume exceeds $15 billion, and over the past 30 days, the total cryptocurrency trading volume amounted to $400 billion.

Due to specifics of the cryptocurrency market, it is impossible to determine the volumes of the Ukrainian one. Moreover, there is no comprehensive analysis of its volumes. At the same time, in 2017, Ukraine was among TOP-10 countries by the number of Bitcoin users as estimated by forklog.consulting and axon.partners. It is clear that the interest of Ukrainians in the cryptocurrency market is growing and the number of operations in the market is increasing. This is evidenced by the growth of trading volumes and trading pairs on the popular Ukrainian KUNA cryptocurrency exchange.

However, in Ukraine, this market is developing under a lack of legal clarity. This creates problems both for achieving the goals of state regulation and ensuring the legal protection of market participants. For example, in 2014, the NBU explained in its letters that Bitcoin is a money surrogate, and now the courts refer to the relevant letters when considering cases. It is prohibited to use money surrogates as a means of payment. However, in 2017, financial regulators made a joint statement saying that it was impossible to determine the legal nature of cryptocurrencies and that cryptocurrencies are not a monetary surrogate, but this joint statement was not issued as an official document and had no legal status.

Such issues as the classification and taxation of operations, accounting, licensing or other restrictions on activities with cryptocurrencies also have no clear solution in the current legislation. It can be said that the cryptocurrency market is actively developing without state regulation. In this case, the state should determine:

  • a legal status of cryptocurrencies;
  • objectives of the state market regulation;
  • classification of operations with cryptocurrencies;
  • taxation of operations with cryptocurrencies;
  • ways to prevent money laundering using cryptocurrencies;
  • ways to protect consumers in the cryptocurrency market.

The BRDO Office is launching a review of the cryptocurrency market in Ukraine and encourages all those who are concerned about this topic to join.

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