Ukraine intends to become the center of digital currency, but foreign experts believe that this would have negative consequences, only exacerbating the high level of corruption in the country.
In early May, one of the Ukrainian MPs published a document proposing to transform several Energoatom enterprises into mining centers. The project was presented as an option to sell the “surplus” electricity produced by the country's nuclear power plants to transform the surplus into additional cash. Plans also include the construction of one Bitcoin mining factory near the Rivne nuclear power plant in collaboration with Bitfury and one more $700M mining center near the Zaporizhzhia nuclear power plant,
Cyprus-based firm Yom Capital is involved in the deal with the latter. She greatly interested in the media since the corporate track of Yom Capital is extremely small. However, so is the reputation of the South East Trading company associated with it, which has only a legal postal address, to which many other companies are registered.
Today, more than 100 cryptocurrency companies operate on the territory of Ukraine, although the legislative issue for the industry is still unresolved. Adding fuel to the fire is the fact that from July 2019 to June 2020 alone, more than 8.2 billion dollars in cryptocurrency equivalent were withdrawn from Ukraine. Now, the country's size of daily crypto transactions is estimated at $150-$200 million.
Another reason for foreign experts' concern was that the new asset class was chosen by local deputies, who were previously seen in various monetary frauds. As of the end of March 2021, officials entered more than 46351 BTC in their declarations. Consequently, some of them may well have used digital currency for money laundering, a process that has long become a headache for global regulators.
The report of the Ministry of Digital Industry of Ukraine marks that the crypto business will be offered to pay 5% of taxes on income, exempting them from VAT. Such a grace period is provided until 2025 to attract investors.
Seeking to transform the agrarian economy into a high-tech one, the country is making a bold bet. According to preliminary estimates, if legislation is created to regulate digital currencies, the number of companies in this area will grow from 100 to 2000, making Kyiv the epicenter of cryptocurrencies and Ukraine an attractive place for mining and the entire crypto industry.
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