Oleksandr Turchynov: The development of the cryptocurrencies market cannot be left out of the state’s attention

The development of the cryptocurrencies market cannot be left out of the state's attention. This was stated by Secretary of the National Security and Defense Council of Ukraine Oleksandr Turchynov during the meeting of the National Cybersecurity Coordination Center.

At the meeting chaired by Secretary of the NSDC of Ukraine, the results of testing of information-telecommunication systems of state authorities and critical infrastructure objects, most important for the security and defense of the state, regarding the vulnerability of cyberattacks were considered; issues of information security in the system of biometric verification and capturing of biometric data at points of entry through the state border of Ukraine, as well as other issues of cybernetic defense of the country were discussed.

In addition, the participants of the meeting considered a complex of problems related to the uncontrolled circulation of cryptocurrencies in the territory of Ukraine.

According to the information from the leadership of the National Bank of Ukraine, the Security Service of Ukraine and the National Police of Ukraine, the lack of external and internal control over the cryptocurrencies turnover and anonymity of payments create prerequisites for their use in order to legalize criminal assets, to pay for prohibited goods, in particular, drugs and weapons, and provides for financing of terrorism, in particular, in the occupied territories of Ukraine.

According to Mr. Turchynov, the further removal of the state from this issue and the legal vacuum in the cryptocurrencies market due to lack of legislative and regulatory framework "poses a threat to the economy and security of the state". "Given the rapid development of cryptocurrencies in the world, this issue cannot be left out of the state's attention", - Secretary of the NSDC of Ukraine noted.

The decision of the National Cybersecurity Coordination Center instructed the relevant authorities to set up a working group with the participation of representatives of the National Bank of Ukraine, the Ministry of Finance of Ukraine, the National Securities and Stock Market Commission of Ukraine, the SSU, the National Police of Ukraine, the State Financial Monitoring Service of Ukraine, the State Fiscal Service of Ukraine and the State Service for Special Communications and Information Protection of Ukraine to develop legal proposals for regulating this issue; to define the state regulator and the order of functioning of the cryptocurrencies market; to establish the order of monitoring transactions with the use of cryptography and identification of subjects of cryptocurrency transactions; as well as to set up the procedure for taxation of income from transactions using cryptocurrencies in accordance with the requirements of Ukrainian legislation. The National Bank of Ukraine is considering the relevance of establishing its own cryptocurrency.

Moreover, the authorities were assigned to develop a mechanism for ensuring access of law enforcement bodies to the data of cryptocurrency exchanges with the obligation of the given subjects to store information about all transactions within the period established by law for financial institutions and disclosure of customer information on a motivated request. The development and implementation of all these measures will also include boosting international cooperation to establish a comprehensive regulation of the cryptocurrencies circulation and to avoid the criminalization of this segment.