Crypto-Assets: The First Year of the “Supervisory” Regime

The Regime Began Not With a Tax, but With Reporting

The phrase “the first year of the supervisory regime” as applied to Ukrainian crypto-assets calls for a qualification. As of August 2026 Ukraine has neither a dedicated supervisory regime for virtual assets nor a settled tax regime for assets of this kind. Law of Ukraine No. 2074-IX of 17.02.2022 “On Virtual Assets” was adopted and signed long ago, yet it has still not entered into force, because its final provisions make entry into force conditional upon amendments to the Tax Code of Ukraine governing the taxation of transactions in virtual assets. No such amendments exist to this day.

Nevertheless, 2026 has indeed become the first year of a regime – only not a tax regime in the classic sense, but a regime of supervision. First, on 1 January 2026 the OECD Crypto-Asset Reporting Framework (CARF) went live in the first wave of jurisdictions; then, on 1 July 2026, the updated CRS 2.0 rules became applicable in Ukraine, under which the holding of a client’s crypto-assets and private cryptographic keys is treated as a custodial account, and the services performing it – as reporting financial institutions. In other words, the state began collecting data on crypto-assets before it determined how exactly to tax them.

For the holder of crypto-assets this creates the least comfortable combination imaginable: the obligation to declare income already exists under the general rules, a mechanism for deducting acquisition costs does not yet exist, and the channel through which the supervisory authority will obtain information about transactions is already open.

What Changed on 1 July 2026

The Procedure for the Application of the Common Standard on Reporting and Due Diligence for Financial Account Information was approved by Order of the Ministry of Finance of Ukraine No. 282 of 26.05.2023, as amended on 15.06.2026. The grounds cited for issuing the order include subparagraph 39-3.1.4 of paragraph 39-3.1 of Article 39-3 of Section I of the Tax Code of Ukraine, and its purpose is to give effect to Ukraine’s commitments under the Multilateral Competent Authority Agreement on Automatic Exchange of Financial Account Information.

Hence the first important conclusion: no separate law on crypto reporting was ever adopted. The regime was introduced by a subordinate act of the Ministry of Finance within the powers conferred by Article 39-3 of the Tax Code of Ukraine, and the order itself enters into force on the day of its official publication. At the same time, the text of the Procedure consistently marks the new rules with the formula “amendments to this Procedure which apply from 01 July 2026”. Crypto-assets came within the scope of reporting not through a new tax and not through the Law of Ukraine “On Virtual Assets”, but through the updating of definitions in the Procedure already in force.

The Mechanism: How Exactly Crypto-Assets Entered the CRS Perimeter

Media headlines very often present the changes as “crypto exchanges have become reporting institutions”. The primary text of the regulatory acts is considerably more precise, and that precision has practical consequences:

• the term “Financial Asset” has been supplemented with “Relevant Crypto-Assets” – that is, a crypto-asset has become a financial asset for the purposes of the Procedure;
• the term “Custodial Account” has been supplemented with a new paragraph: any arrangement for holding or administering an instrument that enables the transfer of control over a Financial Asset issued in the form of a Crypto-Asset (for example, a private key) is likewise a Custodial Account – provided that the entity is able to manage, trade or transfer the asset on the client’s behalf for the benefit of third parties;
• the term “Investment Entity” has been extended to investing in, administering or managing Relevant Crypto-Assets and trading in them, but with an express caveat: carrying out Exchange Transactions is not in itself regarded as such investing or managing;
• the term “Depository Institution” has been extended to persons that hold Specified Electronic Money Products or Central Bank Digital Currencies for the benefit of clients;
• income derived from Relevant Crypto-Assets has been classified as passive income, which directly affects the qualification of an entity as a Passive Non-Financial Entity and, accordingly, the disclosure of its controlling persons.

The practical conclusion sounds different from the headlines. What CRS 2.0 primarily captures is custody – a service that holds a client’s assets or private keys and is able to deal with them on the client’s instructions. An exchanger that does not hold client assets does not become an Investment Entity merely by virtue of effecting exchanges: that activity is addressed by CARF, not by CRS. Tellingly, the term “Reporting Crypto-Asset Service Provider” was introduced into the Procedure but is used for the purposes of defining a “Relevant Crypto-Asset”, and not to impose a stand-alone reporting obligation on such a provider. The construction implemented by our state therefore closes the custodial segment for now, rather than the entire market.

The definition of a “Relevant Crypto-Asset” also contains an exception that will be relied upon in practice: it does not cover a Central Bank Digital Currency, a Specified Electronic Money Product, or any crypto-asset in respect of which the reporting provider has duly determined that it cannot be used for investment purposes or for making payments. This is a narrow but real corridor for utility tokens.

Due Diligence Deadlines: Whose Accounts Are Reviewed First

For accounts that qualify as Financial Accounts precisely because of the CRS 2.0 amendments, the State Tax Service has published a separate matrix of deadlines for completing due diligence:

• new accounts opened on 1 July 2026 or later – review by 31 December 2026, inclusion in the report from 1 July 2027;
• pre-existing High Value individual accounts (over USD 1 million as at 30 June 2026) – by 31 December 2026, report from 1 July 2027;
• pre-existing Lower Value individual accounts – by 31 December 2027, report from 1 July 2028;
• entity accounts with a balance exceeding USD 250 thousand as at 30 June 2026 – by 31 December 2027, report from 1 July 2028.

A new Excluded Account has been introduced separately: a depository account reflecting the Specified Electronic Money Products of a single client is not reportable if the average end-of-day balance over a period of 90 consecutive calendar days does not exceed the equivalent of USD 10 thousand throughout the entire calendar year. This is an exception for electronic money, not for crypto-assets – a widespread error in the retellings of this rule. Another new Excluded Account is an account for the formation or increase of a company’s share capital, provided that the funds are blocked and the account exists for no more than 12 months.

Two further changes have a direct impact on clients with international structures. First, the list of circumstances in which a self-certification cannot be treated as reliable has been supplemented with the case where a person claims residence in a jurisdiction operating a citizenship- or residence-by-investment programme classified as high-risk and has not provided additional supporting documents. Second, in the case of multiple tax residence, the person is obliged to inform the financial institution of residence in all relevant jurisdictions as if the double tax convention did not apply. The scope of information in the report has also been expanded – in particular, whether a self-certification was provided, the type of account, whether it is a joint account and the number of co-holders, and the manner of control through which a Controlling Person exercises control. For the 2026 and 2027 reporting years, part of this information is reported only where it is available in the institution’s electronic searchable database.

The logic is familiar to anyone who studied the mechanics of the first CRS cycle in 2024: the large balances first, everyone else afterwards. A person holding a substantial portfolio with a custodial service falls within the first round of review, and precisely in respect of 2026 – the year for which the tax return will be filed in the spring of 2027.

CARF: The Global Framework That Went Live on 1 January 2026

CARF is a standard for the automatic exchange of information on crypto-asset transactions developed by the OECD in 2022 and built on the CRS architecture. It imposes due diligence and reporting obligations on Reporting Crypto-Asset Service Providers (RCASPs) – exchanges, brokers, wallet operators and even individuals who effect exchange transactions for clients. A crypto-asset means any digital representation of value that relies on a cryptographically secured distributed ledger or similar technology.

From 1 January 2026 the first wave of jurisdictions began collecting transaction data; the first exchange will take place in 2027 in respect of 2026. The number of participants in the first wave is stated differently across sources – from 48 to 52 jurisdictions, depending on how those that have already enacted national legislation and those at the final stage are counted. A further 15 to 27 jurisdictions have deferred their first exchange to 2028. The exact composition can, where necessary, be established from the monitoring report of the OECD Global Forum. EU Member States implement CARF through Council Directive (EU) 2023/2226 (DAC8), the rules of which apply from 1 January 2026.

Ukraine is not part of the first CARF wave. That does not, however, mean informational isolation: the CRS 2.0 mechanism covers a substantial part of the same field – custodial holding of virtual assets, electronic money and CBDCs – while the OECD has provided rules to avoid duplicative reporting where the data is already reported under CARF. In other words, information about a resident of Ukraine may arrive through two different channels, and neither of them requires that resident’s consent.

The British Example: The Price of Non-Compliance

The most instructive illustration of how CARF works in practice comes from the United Kingdom. From 1 January 2026 UK crypto-asset service providers collect information on every user and every transaction.

The first report, covering the period from 1 January to 31 December 2026, must be submitted to HMRC by 31 May 2027. Inaccurate, incomplete or unverified reporting attracts penalties of up to GBP 300 per user, while late filing attracts a fixed penalty with an additional daily element. HMRC estimates the additional revenue from the new regime at approximately GBP 315 million by April 2030.

The figure matters not in itself. It shows that states treat crypto reporting not as a technical procedure but as a source of budget revenue, and set penalties at a level at which it is cheaper for an exchange to hand over data about a client than to explain why it did not.

How Crypto Income Is Already Taxed in Ukraine Today

The absence of special rules does not mean the absence of a tax obligation. An individual’s income from transactions in crypto-assets is taxed under the general rules of Section IV of the Tax Code of Ukraine: the personal income tax rate is 18% (paragraph 167.1 of Article 167 of the Tax Code of Ukraine), and the military levy on individuals’ income is 5% (paragraph 16-1 of Subsection 10 of Section XX of the Tax Code of Ukraine). The property and income tax return is filed by 1 May of the year following the reporting year (paragraph 179.1 of Article 179 and subparagraph 49.18.4 of paragraph 49.18 of Article 49 of the Tax Code of Ukraine), and the tax is paid by 1 August (paragraph 179.7 of Article 179 of the Tax Code of Ukraine).

The position of the supervisory authority is stated consistently: income from the sale of cryptocurrency falls within other or foreign income and is subject to declaration. As part of the Ministry of Finance and State Tax Service information campaign “Taxes Protect”, a typical example was even published in November 2025: a 20-year-old trader with income of about UAH 8 thousand per month files a return through the Electronic Cabinet and pays personal income tax and the military levy. Tellingly, the state explains the obligation by reference to a retail trader rather than a large investor.

The principal problem with the current state of regulation is not the rate but the base. Section IV of the Tax Code of Ukraine contains no mechanism for determining the financial result of transactions in virtual assets: there is no list of deductible costs, no loss carry-forward rules and no special provision comparable to paragraph 170.2 of Article 170 of the Tax Code of Ukraine for investment assets. The risk is that the supervisory authority will tax gross proceeds rather than profit. For a trader who has executed hundreds of low-margin transactions over a year, the difference between these two approaches may exceed the entire actual earnings.

With a view to mitigating the risk of tax being charged on the gross proceeds received for a virtual asset, some advise obtaining an individual tax ruling. That advice, however, looks like a formality, since the response of the State Tax Service of Ukraine is by and large predictable and not in the taxpayer’s favour.

Case Law: Recognised as an Asset, but Without a Supreme Court Position

No separate legal position of the Supreme Court expressly qualifying cryptocurrency as an object of property rights within the meaning of civil law has been formulated to date. The case law is developing predominantly at the level of the first-instance and appellate courts and is frankly inconsistent.

A study of the case law shows that in civil disputes crypto-assets are sometimes included in the subject matter of the division of matrimonial property, and the claims may be substantiated by, among other things, information taken from an electronic asset declaration.

In criminal proceedings the approaches may diverge radically: in one and the same case an investigating judge first held that cryptocurrency held in an exchange account met the criteria of physical evidence and imposed an attachment, whereas another judge subsequently reached the opposite conclusion – that digital assets are not physically individualised objects within the meaning of Article 98 of the Criminal Procedure Code of Ukraine – and lifted the attachment.

The International Context: Where the Rates Are Heading

While Ukraine is still settling its basic framework, jurisdictions that already have a regime for the recording and taxation of virtual assets are moving towards higher rates and the abolition of thresholds. With effect from 1 January 2026 Italy raised the substitute tax on capital gains from crypto-assets from 26% to 33%, while the annual exempt threshold of EUR 2,000 was abolished as early as 2025. At the same time, an optional one-off 18% tax was introduced for stepping up the tax basis of existing holdings.

Germany retains the exemption for assets held for more than one year, Portugal for assets held for more than 365 days, and the Czech Republic applies an exemption for long-term holding.

The conclusion for tax planning is straightforward: the difference between jurisdictions is shifting from the question “taxed or not” to the holding period and the quality of acquisition records. Anyone unable to substantiate the date and cost of acquiring an asset loses in any jurisdiction – regardless of the rate.

The Ukrainian Context That Explains the Haste

According to the Chainalysis Global Crypto Adoption Index 2025, cited by the National Securities and Stock Market Commission, Ukraine ranks 8th in the world for crypto-asset adoption and 1st in the world in the population-adjusted ranking. The volume of crypto transactions connected with Ukraine is estimated at approximately USD 206.3 billion, with annual market growth of around 52%.

Setting these figures against the tax statistics explains the legislator’s motivation better than any explanatory note: between January and July 2026 individuals filed some 215 thousand property and income tax returns, declaring UAH 323.9 billion of income for 2025. The gap between the size of the crypto market and the volume of declared income is precisely the quantity for which the reporting system is being built.

What to Do Now: A Practical Sequence of Steps

1. Inventory. Compile a list of all accounts with exchanges and custodial services, all wallets (including non-custodial ones) and all cards to which funds were withdrawn, mapped to the jurisdiction of the service.
2. Visibility assessment. Determine which of these services are reporting under CARF or CRS 2.0, and for what period data about them is most likely already being collected: for the first CARF wave – from 1 January 2026, and for Ukrainian reporting institutions – from 1 July 2026.
3. Reconstruction of the acquisition history. Export full transaction reports for all years and retain payment confirmations and transaction identifiers. This is critical: access to the history is lost together with access to the exchange, and the requirement of documentary proof of costs exists in both scenarios – the current one and the future one.
4. Review of what has been filed. Check whether income from crypto-asset transactions was declared in previous years and, where grounds exist, consider filing an amended return.
5. Residence test. For those who have left the country – verify their status as a tax resident of Ukraine against the criteria in subparagraph 14.1.213 of paragraph 14.1 of Article 14 of the Tax Code of Ukraine. The declaration obligation arises precisely from residence, so this question logically precedes all the others.
6. Readiness for the preferential window. Prepare documents on the origin of assets acquired before the entry into force of the future law, so as to be able to use the transitional rate if one is introduced.

The first year of a tax regime for crypto-assets in Ukraine turned out to be a year without a tax law but with the state’s desire to exercise control. This is an unexpected yet entirely logical sequence: the transparency infrastructure is built to international standards and does not depend on the efficiency of the national legislative process, whereas the rules for determining the tax base depend on that process entirely.

For the holder of crypto-assets this means that the window for putting matters in order is open but beginning to narrow. Data for 2026 is already being collected, while the rules by which it will be assessed are still taking shape. The worst strategy in this configuration is to wait for the final text of the law: when it appears, documents on the acquisition of assets ten years ago will not have become any more accessible, and the transitional reliefs will in all likelihood already carry a specific closing date.

This material is of an informational nature and does not constitute legal advice in any particular matter. The assessment of the tax consequences of transactions in virtual assets depends on the factual circumstances: the jurisdiction of the service, the nature of the transactions, the availability of acquisition records and the status of tax residence.