The cryptocurrency sphere is considered to be one of the fastest growing in the world. Blockchain technology and related digital assets provide humanity with new opportunities, so the number of people who want to invest in cryptocurrency is rapidly increasing. Many financial organizations, including those with a worldwide reputation, are actively implementing blockchain in their activities. The speed of cryptocurrency transactions, the absence of an intermediary institution, relative anonymity and other advantages open up a wide potential for the use of digital assets.

However, along with all sorts of financial and technological benefits, the main drawback of blockchain investments becomes obvious – the ambiguous attitude of governments towards this type of asset. This practically new sphere of economic activity is accompanied by a number of difficulties arising, first of all, due to insufficient legislative regulation in different states. In such conditions, it is very easy for individuals and legal entities to cross the line and violate the law. Punishment in this case, depending on the jurisdiction, can be presented not only in the form of administrative, but also criminal liability.

To avoid such problems, you should enlist the support of the professionals of the Attorneys Association Lawrange. Our crypto lawyer will help to bring legal grounds for the activities of a business using blockchain in accordance with the laws of the jurisdiction of interest. He will tell you how to legalize the exchange, issue and circulation of cryptocurrencies. As a result, you and your business will be protected from all kinds of legal, financial and technical risks.

 

 

Legality of Cryptocurrencies

This type of digital assets is recognized as a legal phenomenon in most countries of the world. This means that any actions with crypto resources, from purchase/exchange to payment for services with their help, are not prohibited. Most of the member countries of the Organization for Economic Cooperation and Development (OECD) and the countries of the Big 20 have been actively adapting legislation to regulate the cryptosphere for several years in a row. Thus, the legitimacy of digital assets is determined and confirmed by the relevant regulations in Japan, Mexico, and the UK. And, for example, in Canada and the USA, the recognition of cryptocurrencies is expressed in the form of registration requirements from the market regulator.

At the same time, in Bolivia, Morocco, Saudi Arabia and some other jurisdictions, there is a complete or partial ban on the use of crypto assets. For example, there are restrictions on:

  • purchase/sale of virtual currencies;
  • using crypto as a means of payment;
  • implementation of the activities of crypto-exchanges;
  • for the initial placement of cryptocoins.

 

At the same time, some countries (for example, Egypt, India, Vietnam, etc.) show a weakening of the negative attitude towards crypto assets.

 

 

Ukrainian Legislation on Cryptocurrencies

Nowadays, regulation of the electronic currency market in Ukraine has not yet taken place, so this area is in the so-called gray zone, that is, outside the legal field. In June 2020, the draft law “On Virtual Assets” was registered. In subsequent years, it was adopted, then returned for revision, and finally, on February 17, 2022, it was signed by the president. However, at the current time, this law has not entered into force due to the need to make some changes to the tax code. In addition, experts agree that even after its entry into force, the virtual asset market (at least a significant part of it) will continue to operate in a gray zone.

At the same time, partial regulation of the cryptocurrency sphere is carried out with the help of the Law “On Financial Monitoring”. It defines cryptocurrency as a virtual asset available for sale, transfer and use for payment and investment purposes. The status of a service provider can be granted to any individual, legal entity that deals with crypto:

  • Exchange;
  • Translation;
  • Storage and/or administration;
  • Providing financial services in connection with the offer of the issuer or the sale of virtual coins.

 

Important! In Ukraine, any cryptocurrency transactions worth more than UAH 30,000 are subject to verification, the specifics of which are determined by the client’s risk profile (amount of transactions, goals, regularity of business relations, etc.). Such a transfer must include the account/purse number or multipurpose card number of the payer and recipient.

 

 

How Cryptocurrencies are Taxed in Ukraine and the World

In the case of mining and receiving cryptocurrencies, an individual must pay an income tax of 18% and a military tax of 1.5%. At the same time, the basis of crypto taxation is determined by the income that was accrued during the reporting tax period. Since the official currency in Ukraine is represented by the hryvnia, the income is determined in hryvnia. It is included in the tax return on property status and income.

The Ukrainian Law “On Financial Monitoring” encourages the regulator to closely monitor transactions with crypto assets. In this regard, when making transactions that must be checked, it becomes quite possible to introduce restrictions on the client’s account. Also, restrictions are applied in order to counteract fraudsters.

As for the global practice of crypto taxation, here it is necessary to build on its official definition in specific jurisdictions. For example, in Australia, France, Sweden, virtual currencies are called intangible assets, in Austria, China, Ukraine – a virtual good, and in the USA there is no official definition at all. Proceeding from this, the issue of income tax, VAT, etc. is regulated.

Important! If an enterprise buys a cryptocurrency, the income is subject to an income tax of 18%. The main problem in this case lies in the uncertainty of the primary documents that could confirm the purchase / sale of the crypt. In addition, the taxation of individuals and legal entities dealing with crypto assets should be based on official sources of information about the value of electronic coins, which simply do not exist. All these and other problems have yet to be solved by Ukrainian legislation in the long term.

 

 

Cryptocurrency Tax Lawyers

Ukrainian legislation regarding cryptocurrencies, including their taxation, is at the initial stage of development. Due to the lack of clear definitions in the law, investors and businessmen are not able to independently reduce all kinds of risks in cryptocurrency transactions. In addition, it is quite difficult to figure out how to pay tax to individuals and legal entities in the new provisions of the Tax Code. This legal document does not fully explain what transactions should be taxed and what rate to pay.

In such an ambiguous situation, it is important to enlist the support of professionals. The blockchain lawyer of our company will help you navigate all the nuances of the updated legislation and fulfill your obligations without violating the law. He will determine the tax on crypto transactions, fill out the necessary documentation and give step-by-step instructions on how to apply to the tax authorities.

 

 

Characteristics of a Professional Crypto Lawyer

This specialist is well versed not only in narrow-profile legal issues, but also in the functioning of the fintech industry. He knows how:

  • State regulation is taking place, which regulatory framework determines the principles of business interaction with blockchain projects.
  • Use the tools of the crypto market.
  • Apply effective protection of the rights and interests of the client in any instances.
  • Mining, smart contracts, etc. function.
  • Work in the sector of LegalTech and legal support of virtual business.
  • Digital activity is regulated in criminal and civil law.
  • Identify and mitigate risks of a different nature.

 

A cryptocurrency lawyer will not allow you to become a victim of scammers or your own incompetence.

 

 

How Our Lawyers Can Help

Taking into account the underdevelopment of legislation on this issue, consulting in the field of cryptocurrencies is practically vital for businesses of any size. Each jurisdiction puts forward its own requirements for the regulation of virtual assets. At the same time, Lawrange lawyers will help:

  • Register a business entity or a company working with crypto assets.
  • Resolve disputes that are not uncommon in the process of investing in blockchain projects.
  • To understand all the exciting related issues – comprehensive legal advice in the field of cryptocurrencies will be useful for both individuals and legal entities.
  • Maintain all necessary reporting documentation.

 

A crypto lawyer will be a useful participant in negotiations and transactions, as he is familiar with the current legislation of most jurisdictions that are popular for doing crypto business. Representing the interests of the client in credit, tax and other instances, he knows how to avoid unnecessary risks and serious problems.

Cryptoconsulting aims to develop and implement technological roadmaps that will be useful in achieving your goals. The combination of business, legal and technical skills makes our specialists a valuable tool in supporting your crypto business.

 

 

Pre-trial Settlement of Crypto Disputes

Our team of lawyers is well acquainted with all the nuances of working in the field of crypto assets. For this sector, all sorts of disputable situations related, for example, to blocking accounts, wallets, accounts, transactions, etc. are not uncommon. In most cases, it is quite possible to resolve many disputes even at the pre-trial stage. To do this, you need to enlist the support of Lawrange professionals who:

  • study the user agreement in detail;
  • prepare the necessary documents;
  • negotiate with the administration of cryptoplatforms, if they fail to achieve a result, they will defend the interests of the client before the regulators of the jurisdiction in which the cryptocompany is registered.

 

 

Assistance of Crypto Lawyers in Court

Entrepreneurs and companies working in the field of cryptocurrencies may at any time be faced with the need to defend their interests in court. Our crypto lawyers will help you do this as efficiently as possible. They will collect all the necessary evidence, draw up a substantiated statement of claim and accompany your case at all stages of the trial. At the same time, the interests of clients can be represented in courts of various jurisdictions.

 

 

Features of Legal Services in ICO

ICO projects are the process of initial placement of coins, and are one of the methods of crowdfunding. Their goal is to issue blockchain-based digital tokens for subsequent exchange for popular types of cryptocurrencies. ICO must be carried out strictly within the law. With this in mind, consulting in the field of cryptocurrencies allows you to get:

  • Detailed project appraisal.
  • Assistance in choosing the most appropriate jurisdiction.
  • Support in the process of issuing all necessary permits.
  • Assistance in the development of corporate documents, which also include White Paper.

 

Cryptocurrency legal support will help beginners to get acquainted with all the basic ICO processes and adapt the business to the current legislation. ICO experts will help you choose the best path for your business and provide support during the first launch.

 

 

What Else Crypto Lawyers Can Do

Turning to Lawrange, you can count on a wide range of assistance in the crypto sphere, ranging from opening a crypto company, registering a crypto fund, unlocking crypto wallets, and ending with representing your interests at the pre-trial and judicial stages in settling crypto disputes. We will be helpful if you need to determine the legal risks and boundaries for the normal operation of your business.

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When registering a company for crypto activities, our crypto lawyer will help you obtain all the necessary licenses and open accounts. He will represent you during negotiations with regulators. Using the services of experienced fintech lawyers will help you achieve any business goals without having to worry about the risk of violating legal regulations. Our specialists are well aware of the legal and technical issues of the cryptosphere, due to which it will be possible to avoid problems with law enforcement and fiscal authorities of the jurisdiction of interest.

 

 

FAQ

Is there criminal liability in Ukraine for tax evasion when selling cryptocurrency?

Yes, but only in case of an officially confirmed budget shortfall of more than UAH 3,400,000 in taxes.

 

Is it possible to cooperate with a blockchain lawyer remotely?

Yes, in most situations you can use this option.

 

Are funds received from the sale of cryptocurrencies taxed?

Funds credited to your bank account are considered income. Therefore, the rate is 18% tax and 1.5% military duty. Moreover, the entire amount of funds received is subject to taxation.

 

Do I need to include cryptocurrencies on my annual tax return?

Individuals who own crypto assets are exempted from such a need.

 

 

 

 

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