Ukraine Issues Clarification on Legal Status of Bitcoin

Ukraine’s central bank, the National Bank of Ukraine (NBU), has issued a statement about the regulations covering digital currencies like Bitcoin, as well as the legal status of the cryptocurrencies.

The move was made by the central bank following the arrest of several individuals for allegedly mining Bitcoin illegally in the second week of August 2017.

During a raid at the state-owned Paton Electric Welding Institute in the country’s capital of Kiev, the Ukrainian National Police has found 200 computers that were set up in an unused swimming pool inside the institute’s campus for Bitcoin mining.

The NBU’s position on cryptocurrencies

In its statement, the NBU clarified that there is only one currency that is being used in Ukraine and that is the hryvnia. No other currency or substitute currency can be issued or used as a form of payment in the country other than hryvnia.

The NBU also claimed that the status of Bitcoin in the country is complicated by the absence of a consolidated effort to classify and manage the cryptocurrency around the world as it is considering to better regulate digital currencies:

“In different countries, Bitcoin is classified in different ways – as virtual currency, money surrogate, intangible value, virtual goods and the like. For its part, the NBU has not officially supported any of the above definitions.”

Other contrasting opinions about the digital currencies

Several lawyers, however, have contradicted the position statement issued by the NBU. They claimed that cryptocurrency mining is lawful in the country.

According to law firm Yuskutum managing partner Artem Afyan, engaging in digital currency mining in the country is absolutely legal:

“The arguments of the National Bank that the cryptocurrency is an unsecured ‘money surrogate’ are only a warning. It does not mean prohibition of their use.”