Companies mining cryptocurrencies are not required to obtain a license, the Ukrainian state agency responsible for licensing regimes said this week. The annual revenue generated by the Ukrainian crypto mining industry amounts to over $100 million, according to recently published data. The country remains attractive to miners while mining costs in many other corners of Europe are simply prohibitive, at the current price of bitcoin.
No Plans to Introduce Licensing for Miners
Cryptocurrencies can be mined in Ukraine without a license, according to the State Service of Special Communication and Information Protection, the regulator that oversees activities requiring licensing. The agency is not planning to introduce such an obligation in the sector in the near future, it said in a response to an enquiry filed by the Better Regulation Delivery Office organization (BRDO).
According to BRDO, however, not recognizing mining as an economic activity that needs licensing and as a service providing “cryptographic protection of information” is one of the main issues in the local crypto industry. “Market participants have been threatened with a tangible sanctions – fines and confiscation of equipment and cryptocurrency,” said Igor Samodhodsky, an expert at BRDO, quoted by Forklog.
Samodhodsky also noted that entrepreneurs and companies operating in the sector usually try to avoid official registration because of the uncertain legal status of cryptocurrencies and crypto transactions. “The unpredictability of the actions of their counterparties and authorities creates a number of obstacles to their activities,” the BRDO representative emphasized.
Ukrainian Miners Make $100 Million Annually
Crypto mining is just one of the segments of the country’s crypto industry awaiting comprehensive regulation. Ukrainian authorities have so far failed to meet these expectations. Three draft laws have been filed in the Rada since October but deputies have not made any significant progress towards their adoption. These are the bill “On the Circulation of Cryptocurrency in Ukraine”, the law “On Stimulating the Market of Cryptocurrencies and Their Derivatives”, and a supplementary draft covering taxation of crypto incomes and profits. Moreover, the recently adopted Currency Law did not even mention cryptocurrencies.
In March, the Ukrainian government supported an initiative by the Economy Ministry to add mining to the national register of economic activities. Several ministries, agencies and the National Bank are engaged in the preparation of the necessary documents. No time frame was given for the completion of the procedure, which amounts to legalization. Last month, BRDO announced that Ukrainian crypto mining companies generate more than $100 million of revenue annually…