Crypto ATM / kiosk operator in Ukraine

Define virtual assets and their legal status.

Regulate the market for virtual assets.

Protect the rights of participants in the virtual asset market.

Establish anti-money laundering and counter-terrorist financing (AML/CFT) requirements for virtual asset service providers (VASPs).

National Bank of Ukraine (NBU): Responsible for the regulation of virtual assets secured by currency (fiat-backed stablecoins) and for payment services involving virtual assets.

Ministry of Digital Transformation of Ukraine (MinDigital): Responsible for the regulation of other types of virtual assets, including licensing of Virtual Asset Service Providers (VASPs).

State Financial Monitoring Service of Ukraine (SFMS): Responsible for financial monitoring of transactions with virtual assets and ensuring compliance with AML/CFT legislation.

Law of Ukraine "On Virtual Assets" (Закон України "Про віртуальні активи"): Link to Ukrainian Parliament (Verkhovna Rada) website - official legislative acts (You may need to use a translation tool for the full text).

While the VA Law is in force, its full implementation, particularly the practical licensing mechanism, depends on the adoption of secondary legislation (resolutions, procedures, and detailed requirements) by the NBU and MinDigital.

As of late 2023/early 2024, this secondary legislation has not yet been fully adopted, meaning the actual process for obtaining a license is largely suspended or not fully operational. The focus of the government has been on wartime priorities.

Exchange services between virtual assets and fiat currencies. (This covers traditional crypto exchanges).

For exchanges (providers of exchange services between virtual assets and fiat): Potentially around UAH 10 million (approx. $250,000 - $300,000, subject to exchange rate fluctuations).

For other VASP activities (e.g., custody, transfer): Potentially around UAH 5 million (approx. $125,000 - $150,000).

Currently, the exact, officially finalized capital requirements are pending the adoption of secondary legislation.

However, previous drafts and discussions indicated potential capital requirements, which could be subject to change:

These are indicative figures from drafts and should be verified once official regulations are published.

This is a cornerstone of the VA Law and is largely aligned with international standards (FATF recommendations).

VASPs will be subject to the Law of Ukraine "On Preventing and Countering Legalization (Laundering) of Criminal Proceeds, Terrorist Financing and Financing the Proliferation of Weapons of Mass Destruction."

Law of Ukraine No. 361-IX "On Preventing and Counteracting Legalization (Laundering) of Criminal Proceeds, Terrorist Financing and Financing the Proliferation of Weapons of Mass Destruction" (dated December 6, 2019, with subsequent amendments).

This is the foundational AML/CFT law in Ukraine, bringing the country's framework closer to FATF recommendations and the EU's 4th and 5th AML Directives. It designates "virtual asset service providers" as "reporting entities" (subjects of primary financial monitoring).

Law of Ukraine No. 2074-IX "On Virtual Assets" (dated February 17, 2022).

This law defines virtual assets and virtual asset service providers (VASPs) in Ukraine. While its full implementation regarding licensing and specific regulatory oversight was initially delayed due to martial law, its principles establish the legal framework for virtual assets and clarify the roles of regulatory bodies. It reinforces that VASPs are subject to AML/CFT requirements under Law No. 361-IX.

Exchange between virtual assets and fiat currencies.

Identification and Verification:

For Individuals: Obtain and verify the customer's identity, including full name, date of birth, place of birth, address, identification number (where applicable), and details of the identity document (series, number, date of issue, issuing authority). Verification must be based on reliable, independent source documents, data, or information.

For Legal Entities: Obtain and verify the legal entity's name, registration number, legal form, legal address, contact details, and identify the management structure.

Beneficial Owner (UBO) Identification: Identify and take reasonable measures to verify the identity of the beneficial owner(s) of the customer. This is crucial for both individuals (e.g., if acting on behalf of another) and legal entities.

Understanding the Business Relationship:

Conduct ongoing monitoring of the business relationship and transactions undertaken throughout the course of that relationship to ensure consistency with the VASP's knowledge of the customer, their business, and risk profile. This includes monitoring the source of funds and the destination of virtual assets.

Enhanced Due Diligence (EDD):

Customers who are Politically Exposed Persons (PEPs), their family members, or closely associated persons.

Transactions involving high-risk jurisdictions.

Complex, unusually large, or unusual patterns of transactions that have no apparent economic or lawful purpose.

Non-face-to-face business relationships without adequate safeguards.

Transactions above specific thresholds (e.g., equivalent of UAH 400,000 for certain types of operations, though suspicion requires reporting even below this).

Simplified Due Diligence (SDD):

Legal Basis: Criminal Code of Ukraine (Кримінальний кодекс України), Code of Administrative Offenses of Ukraine (Кодекс України про адміністративні правопорушення).