Last week, Ukraine's State Service of Special Communication and Information Protection said cryptocurrency mining companies would not need to obtain a license in order to conduct their activities.
The announcement was a response to an inquiry filed by the Better Regulation Delivery Office Organization (BRDO), CoinGeek reports.
Cryptocurrency mining in Ukraine has greatly increased over the last couple of years. According to reports, the country earned revenues of more than $100 million from cryptocurrency mining companies. Crypto miners have moved to the country as it offers favorable conditions to mine cryptocurrencies. In addition to a relaxed regulatory landscape, crypto miners in Ukraine also enjoy low electricity cost of less than $0.04 per kWh.
According to a research conducted by Worldcore, a crypto exchange and payment provider, miners in countries like Ukraine get huge profits compared to their counterparts in Germany and Italy. According to the research, bitcoin miners in countries with low electricity costs among them Czech, spend less than $3,500 in mining cryptocurrencies like Bitcoin. On the other hand, miners in Germany spend about $7,964 to mine a single crypto. While the cumulative cost for mining in Germany is more than the current market price for the coin, the same process in Czech results in over 100% in mining profits.
The choice of regulation-free crypto activities in Ukraine is intended to attract more miners, who, in turn, will increase the general revenue from the trade. However, BRDO is not entirely thrilled by the decision. In its opinion, lack of regulation causes more harm to the industry. According to BRDO, lack of regulation has led to sanctions and threats from some authorities. Some crypto miners have lost essential equipment to authorities who claim their operations in the country are wrong, while others have ended up losing their hard earned cash due to lack of regulatory frameworks.
Currently, there are three bills filed on the Rada targeting the cryptocurrency sector. The first is on the “Circulation of Cryptocurrency in Ukraine,” the second focuses on “Stimulating the Market of Cryptocurrencies and their Derivatives,” while the third one is a supplementary draft on taxation of crypto incomes and profits.