Ukraine to Legalize Cryptocurrency in Early 2025, Tax Breaks Not Included

Ukraine is expected to legalize cryptocurrency in the first quarter of 2025, but tax breaks for the sector are unlikely, according to Danylo Hetmantsev, head of the parliamentary tax committee.

Speaking at the Economic Pravda forum ‘Investment Prospects Within the Country’ on December 11, Hetmantsev said a working group is finalizing a draft law on cryptocurrency regulation.

“If we talk about cryptocurrency, the working group is completing preparations for the draft law’s first reading. I believe we will finalize the text in cooperation with the National Bank and the IMF after the New Year, and the legislation will be adopted in the first quarter, legalizing cryptocurrency,” Hetmantsev said.

The market of virtual assets in Ukraine remains largely unregulated, despite the country being among the global leaders in transaction volume. Ukrainian blockchain specialists and crypto exchanges have found success abroad, operating within the legal frameworks of the EU and the US, but these businesses cannot register or pay taxes in Ukraine.

Two draft laws aimed at legalizing the sector were introduced in 2023, addressing taxation and regulatory oversight, but differences between proposals have delayed progress. Lawmakers are now finalizing a new draft law aligned with European standards.

The new legislation will not include tax incentives for cryptocurrency. Instead, taxation will follow a securities model, with profits taxed when assets are converted into fiat currency.

“In consultations with European experts and the IMF, we’ve taken a cautious approach to granting tax breaks for cryptocurrency, given the potential for tax evasion in traditional markets,” Hetmantsev explained.

Bitcoin surged in price following Donald Trump’s re-election, reaching an all-time high of $103,647 on Dec. 5, 2024, reflecting renewed investor confidence and heightened interest in the cryptocurrency market.