AIN.UA researched how the private investments of young people have changed over the past few years, the reasons for those changes, and why we should save for our future pensions right now.

When and why do the youth start to invest?

According to the AIN.UA survey, which had 82 participants, most people begin investing at the age of 21-25 (34.6%) and 26-35 (34.6%). People younger than 20 and older than 40 are less likely to make investments (5% each).

Over the past ten years, based on my experience, many more young people started thinking about investing,

Halyna Trytiak, a Financial Advisor, said AIN.UA.

She noted that people continue to invest or only begin to invest even though Ukraine has not experienced stability in recent years.

“Under stresses and risks, we tend to care about our future. People started saving more during the pandemic and are now considering investing. Generally, we think less about resources during stable periods, and more likely, we would think of security at unstable times,

Trytiak explained.

The respondents had different opinions regarding the influence of the full-scale war on investments:

• 31% stated the full-scale war had no influence on their intentions to invest;
• 26% admitted that war negatively influenced their wish to invest. About a fifth of them see no perspectives in investing in Ukraine;
• 20% answered that the full-scale war positively impacted their intentions to invest, and one-third of them made the first investments in their life.

Where do young people invest?

The most popular investing goals, according to AIN.UA survey, are:

Cryptocurrencies

Compared to the previous investor generation focused on real estate and deposits, the current youth prefers to invest in stocks and cryptocurrencies, the founder of the Simeinyi Budzhet, a financial literacy project, and a partner at iPlan.ua, Lyubomyr Ostapiv, emphasized.

So, the respondents recalled low entry threshold, accessibility, and high profitability as the main advantages of cryptocurrency investments.

Cryptocurrencies seemed to be the fastest and easiest way to multiply your capital,

said a survey participant, Roman, a QA Engineer.

He started investing in cryptocurrencies in 2021 after mining Ethereum for two months. His first $1,000 was invested in diverse coins: ETC, Solana, XRP, Luna, Matic, and Ada. He spent another almost $4,000 on a mining farm.

Roman continues investing in cryptocurrencies, while many of his contemporaries find it only a backup option.

Speaking of cryptocurrencies as an asset, it becomes more attractive when increasing value. When it decreases, all the hype also disappears. So I wouldn’t say many investors regularly go in and out,

Halyna Trytiak summarized.

She calls cryptocurrencies one of the riskiest assets with the lowest substantial base and asks to pay attention to such high-risk investments.

Despite all their popularity, Ukrainians don’t show a general trend to save in cryptocurrencies. Only 13% of the survey participants prefer this kind of saving. Most Ukrainians, 93.9%, prefer the US Dollar, 53.7%, the Euro, and 41.5%, the Hryvnia.

Stocks

The second most popular investment target of AIN.UA readers is company stocks. It is a long-term saving plan, Lyubomyr Ostapiv stated.

Ukrainians invest more in foreign companies because of apparently lower risks. That interest in foreign stocks has been stable for a few years already.

Clients are mostly interested in Eurobonds of Ukraine or blue chips — Apple, Microsoft, Tesla, etc.,

said Yevheniia Hryshchenko, Deputy Director at ICU Group, in an interview for Minfin.

In early 2022, foreign securities grew popular in Ukraine since people could purchase them via mobile banking apps. However, the trade volume decreased with the beginning of the Russian full-scale invasion when Ukrainian regulatory bodies temporarily paused the trade.

First, there were transaction amount limits: Ukrainians could transfer not more than UAH 100,000 a month to foreign broker accounts. In May 2022, the regulator entirely forbade external transactions to buy securities, stocks, and bonds and pay broker fees.

In August 2022, the National Securities and Stock Market Commission lifted most equity and commodity market transaction restrictions.

“The equity and commodity markets worked manually during the first five months of the full-scale war. The regulator monitored and analyzed the results of each permitted transaction. It would be nonsense in a peaceful life, but the war brought new circumstances. Thanks to that individual approach and conservative politics, we have managed to overcome panic, save assets, and avoid defaults for several securities,” 

A PHP Engineer, Mykyta, started investing in stocks of foreign companies even before the full-scale war. He had to choose a broker available in Ukraine. “There were Interactive Brokers. There was also Freedom Finance Ukraine, which, however, had Russian roots and was already fucked up at that moment.

About Freedom Finance Ukraine

Freedom Finance Ukraine is a company owned by a stockbroker, Timur Turlov, who holds Russian citizenship. Sanctions were imposed on the company in 2023. According to the EP, the total value of the assets blocked on the company’s accounts—shares and bonds of more than 280 issuers—is UAH 3.5 billion.

I chose Interactive Brokers for their protected complicated registration process, equity protection up to $500,000, and access to many tools.”

Mykyta invested mainly in US-based companies over NYSE and NASDAQ. Initially, he traded via Exchange Traded Fund (ETF) and later purchased separate stocks.

I have invested in SCHD, AAPL, COIN, Alphabet Inc. (GOOGL). At that time, the shares of Apple cost me much less. And now they are at the peak level [$208.14 on June 25, 2024 — edit.]. In addition, I invest in dividend funds and buy stocks on hype, which means the most spoken and growing securities at the time. In January, it was CoinList. The most recent one is Nvidia. Or I can invest in some perspective area, for example, related to AI. In general, my portfolio contains preferably technology companies,

said Ruslan Mahomedov, the Director of the Commission, about lifting restrictions.

With the beginning of the full-scale invasion, Mykyta stopped to invest for some time and had to sell most of his portfolio. Later, he resumed his trading activity and almost caught up with the volume he had before. Now, he invests in stocks and cryptocurrencies, plans to invest in real estate and not rely on known domains anymore.

Domestic government bonds

As of April 2024, nearly 178,000 Ukrainians invest in the domestic government bond (DGB) market, 90% of which are military bonds, according to the National Bank of Ukraine’s statement for AIN.UA.

For Tetiana, who works in the digital advertisement industry, an investment in bonds was the second in her life. Before this, she invested in her boyfriend’s company once.

I decided for the bonds to help our army quickly and conveniently, via monobank, and most safely, as it could be during a war,

she explained.

Her motivation to invest was to help the Armed Forces of Ukraine. “My boyfriend, for instance, had invested all his savings in military bonds even though he could purchase stocks of foreign companies. However, risks were not a case here,” Tetiana added.

The ROI of bonds decreases due to increasing inflation and interest rates, Halyna Trytiak explained. However, the existing ROI is high enough to cover the inflation and UAH to USD exchange devaluation. A low entry threshold is a pro. You can start investing with only ₴1,000.

Experts recommend looking at corporate bonds as an alternative. For example, NovaPay and !FEST Coffee Mission, a part of !FEST Holding, issued their corporate bonds. The NovaPay bonds are available via its app.

The bonds of !FEST Coffee Mission are fixed to the US Dollar — it’s an innovation in the Ukrainian market,

said the founder of the Simeinyi Budzhet financial literacy social project and a partner at iPlan.ua, Lyubomyr Ostapiv.

Halyna Trytiak emphasized that the corporate bond market in Ukraine develops because Ukrainians willingly purchase bonds to support businesses they like.

Why do pension investments become more and more popular among young people?

17% of the respondents indicated their concerns about pensions as a reason to invest.

The government can guarantee only minimum social welfare (in 2024, it’s ₴2,361 — edit.). But for more, you must work as long as possible. The First Deputy Minister for Social Policy, Darina Marchak, stated this in a live stream at Espreso.TV in June 2024.

According to her, the demographic situation in Ukraine is critical: one taxpayer works to pay pension one pensioner. “And this situation will highly likely get worse,” the Deputy Minister for Social Policy added.

It is due to the war-related negative migration, the low birth rate that decreased even more during the full-scale Russian invasion, and high early mortality because of warfare.

“Ukraine must be an active longevity nation. We must be interested in and work as long as we can and retire when we feel no physical capacity to work,” thinks Darina Marchak.

Lyubomyr Ostapiv recommends officially working employees to think about long-term pension investments. He noted that people ideally should save for 20 to 30 years. Compound interest, a result of an accumulation from a principal sum and previously accumulated interest, would work better for such a long-term deposit.

Non-state pension funds

The experts advise non-state pension funds (NPF) to invest in private pensions. It is a long-term investment. You can conduct a contract with the fund for several years and pay contributions to your own pension account.

There are traditional risks connected with NPFs: How reliable an NPF is and whether it can offer a ROI more than the inflation rate,

Oleksandr Panchenko, an Advisor of the National Securities and Stock Market Commission Director, said in his commentary for AIN.UA.

He recommends paying attention to how long a fund operates, what its partners are, if they are well-known, etc.

Then, compare the ROI for past years with inflation rates. “If a fund could overcome inflation in a long-term perspective (over ten years in a row), it is worth your attention. There are such funds in Ukraine, and usually, the more assets the fund has, the better the numbers,” Panchenko summarized.

There are 63 officially registered non-state funds in Ukraine, and 58 are active nowadays. After January 1, 2024, non-state pension funds lose the status of financial entities and become organizations under finance service regulations.

Here are the largest Ukrainian NPFs by assets:

• OTP Pension (since 2009) — ₴550 m, 64,000 members;
• Privatfund (since 2004) — ₴428 m, 51,000 members;
• Ukreximbank Fund (since 2005) — ₴394.4 m, 6,000 members;
• Emeryt Ukraine (since 2006) — ₴278 m, 70,000 members.

An alternative can be bank deposits (a possible contra is taxed income) and pension life insurance, Panchenko added.

After planning long-term investing, Roman began investing in MetLife — one of the largest global providers of insurance, annuities, and employee benefit programs, represented in Ukraine with the MetLife PJSC — in his 25.

“I have a 50-year agreement,” Roman explained. “I pay one thousand Hryvnia monthly, plus inflation. So, my recurrent payments will increase with time. The total investment should be around UAH 500,000, which will become ₴1.2 million in 50 years.”

Other international life insurance companies also work in Ukraine: UNIQA, GRAWE, or PZU.

The pension system of Ukraine. The context

The pension system reform started in Ukraine in 2003 with the passing of two bills: “On Compulsory State Pension Insurance” and “On Non-State Pension Provision.” It aimed a shift to a three-level system.

1. Tier 1 is based on solidarity and subsidizing principles. The current pensioners are paid with companies’ and employees’ Pension Fund contributions. Working people’s contributions should also pay the next generations of pensioners.
2. Tier 2 represents an accumulation system of compulsory insurance. The contributions are invested on the contributor’s behalf. The amount of contribution shall not exceed 7% of salary. Retirement savings can be inherited.
3. Tier 3 is voluntary contributions to non-governmental pension funds. The pension fund creates an account on a member’s behalf and accumulates contributions from the individual, their employer, or the member’s family.

Ukraine has a mixed pension system today, where Tier 1 and Tier 3 are functioning. The second level had to pass in 2009, but it is still not working. The draft law “On Compulsory Accumulative Pension Provision,” according to which there should be compulsory accumulative pensions, has not been adopted by the Ukrainian Parliament yet and has remained there since 2021.

In 2023, Prime Minister Denys Shmyhal of Ukraine announced a pension reform that should make solidarity pensions not less than 30% of the average salary of an employee during his life, plus a cumulative component, that Tier 2 component, possible.

The Advisor of the National Securities and Stock Market Commission Director, Oleksandr Panchenko, believes that the launch of Level 2 this year is plausible.

He underlined it should not be about fast paying of contributions. Ideally, it would be a topic for the time after the victory in the ongoing war, stabilization of the economy, and at least two years of building the required infrastructure.

We have been speaking about the launch of the 3-level pension system for 20 years. The longer it takes, the fewer citizens make pension savings, and the lower pensions — solidary and cumulative — they get in the future,

A faster de-shadowing of the labor market can be a benefit of an accumulative pension.

“An accumulative pension is formed from pension contributions and income from their investment. The higher the pension contributions, the higher the pension payable,” explains Oleksandr Panchenko. “Pension contributions are paid from the official salary. If it is low, contributions will be negligible.”

He adds that the accumulation reform will encourage people to get officially employed rather than receive salaries “in envelopes” because their pensions will depend on the amount of official payments.

Even if there were no absent Tier 2 and no demographic crisis, the Ukrainian pension system would still have many problems. Debts for pension recalculation are one of them. State’s debt under court decisions has grown to UAH 66 billion, Darina Marchak said on the Chronicles of Economy podcast.

The debt is related to court cases of ex-military and law enforcement officers. They are subject to special pension legislation that links their pension payments to the current amount of remunerations or salaries of active military and law enforcement officers. The debts also apply to payments to Chornobyl victims.

Other challenges include a possible sharp increase in the number of pensioners. Currently, the Constitutional Court is considering a case on the legality of raising the seniority requirements for retirement for specific categories of citizens. It is a reform adopted in 2017 by the government of then-Prime Minister Volodymyr Groysman. The Verkhovna Rada increased the retirement age: For example, if a person does not have enough work experience at 60, they must work another 3-5 years to qualify for a pension higher than the minimum. De facto, this government decision was equal to a retirement age increase.

If the retirement age requirements amended in 2017 are ruled unconstitutional (and the process is still ongoing), the number of pensioners in Ukraine could increase by tens or hundreds of thousands. Economic Pravda, citing calculations by the Ministry of Social Policy, notes that additional spending on pensions could reach UAH 10.5 billion a year.

Financial literacy of young people

According to the study “Financial Literacy, Financial Inclusion, and Financial Well-Being in Ukraine in 2021,” financial literacy in Ukraine has improved in past years.

Ukrainians aged 25-34 and 30-59 are the most financially literate. The least literate are young people aged 18-19 and over 60.

There is no correlation between gender and awareness: Ukrainian men and women are equally knowledgeable in financial matters (12.3 and 12.2 points, respectively). At the same time, there is a connection between the level of financial literacy and education: The higher the level of education, the higher the financial literacy score. In the AIN.UA survey, almost 95% of young investors reported having a university degree.

Ukrainians are more likely to develop financial literacy by themselves, as the older generation did not teach them how to invest wisely.

According to financial consultant Halyna Trytiak, this is due, in part, to the negative financial experience of the parents of modern youth.

For example, in the 90s, many Ukrainians lost money on the so-called “savings books.” Because of this, parents taught children not to trust financial institutions. Today, under capitalism, the playing field has completely changed, and behavior has not adapted. Still, some people dramatically distrust banks,”

the expert believes.

“All I knew about finances was that “you have to have something behind your soul.” As my grandfather says, you have to save for a rainy day,” Roman, a survey participant, answers the question about financial literacy in the family. Before investing, he worked overtime at several jobs for a long time because he knew he had to use every opportunity to make money.

Another participant, Mykyta, has almost the same situation. “My family had no rules of financial literacy at all, and even saving money was difficult,” he says.

In general, the country’s economic stability also influences the level of financial literacy, Halyna Trytiak emphasizes.

Since independence, we have not had long-term stability in the financial sector for more than five years in a row,” she explains. “Regular devaluation of the Hryvnia, inflation, revolutions, and the full-scale war affect the sense of security and the ability to plan for the long term, for example, for 10-20 years,

Even before the full-scale invasion, according to the study “Financial Literacy, Financial Inclusion, and Financial Well-Being in Ukraine in 2021,” Ukrainians focused more on short-term plans and spending than saving. However, almost 47% of young people surveyed by AIN.UA are ready to invest long-term — for five years or more.

The trend of spreading financial literacy is positive, says financial expert Halyna Trytiak: “Nowadays, young people actively engage in personal financial literacy and teach their children to do the same. There are also financial literacy courses for children and teenagers. Over time, this will ensure positive results.”

Investment tips

Consider your own goals and planning, and only then consider investment prospects. “The correct sequence is to determine your financial goals, whether they are short- or long-term, and what level of risk you are willing to take,” says Tritiak. “If the goal is short-term, up to a year, and you are planning a long-term investment, for example, five years or more, then you should decide whether it is appropriate at this stage.

Analyze investment opportunities: the entry threshold and conditions, the possible investment amount, and taxation conditions for residents or non-residents.

Consider agricultural land as a long-term investment. “Ukraine has great prospects in the agricultural sector. It is both an option that generates passive income and an asset that can grow in value in the future,” Trytiak says. However, she adds that one should take into account the entry threshold: for agricultural land, it is several hundred thousand hryvnias.

Pay attention to public investment based on the REIT (Real Estate Investment Trust) model.

The growth of these mega marketplaces, where people buy and sell their NFTs prompts an analysis of NFT marketplaces from a legal perspective. What are the different types of these marketplaces and what are the legal requirements for each? How should a Web3 entrepreneur choose the right country to establish an NFT marketplace? Taras Zharun, Web3 Virtual Legal Officer at Legal Nodes, explores these questions and more.

More articles about Web3 legal issues you can read in Legal Nodes blog.

What is an NFT marketplace?

Generally speaking, an NFT marketplace is the vehicle, the main activity of which is organization of the sale of NFTs for virtual assets or fiat currencies. NFT marketplaces should not be confused with virtual currency exchanges (cryptocurrency exchanges). The latter facilitates the exchange of one asset into another, which is always a regulated activity in countries with VASP regimes. This differs from NFT marketplaces, which enable the sale of one-of-a-kind (or one-of-few) assets, which sometimes qualifies them as e-commerce platforms.

There are two main roles in each NFT marketplace user flow: creators (those who sell NFTs) and collectors (those who buy NFTs). From a practical point of view, creators could be either the operator of an NFT marketplace, which is common for specialized marketplaces (see below for a further classification on NFT marketplaces), or third party, which is common for universal ones. Creators, as the general rule, register with the relevant marketplace and generate NFTs by means of minting. In turn, collectors may buy NFTs for virtual assets (a common occurrence) or for cash (something that rarely happens).

Types of NFT marketplaces by business model and technology

The most common model of making money with an NFT marketplace is via transaction commission in various amounts and forms. For example, OpenSea charges a commission from the seller for each transaction. Another platform, Rarible charges a fee made up from payments from each party to the transaction.

Another business model employed by NFT marketplaces is charging royalty payments. Each time an NFT is resold, a smart contract collects a marketplace fee for the marketplace. This is not the same as an author’s royalty, which can also be charged depending on the rules written into the smart contract. In either case, NFT royalties are collected automatically via the smart contract, which should not be triggering escrow regulations, however it is important to clearly and transparently lay it all down in the Terms of Use. 

There are many types of NFT marketplaces that have varying characteristics concerning their functionality, technology, and the individual peculiarities of the NFTs sold, for example. Subsequently it should be noted that the following classification offers a more universal, or holistic definition of NFT marketplaces.

NFT marketplaces can be subject to different regulatory regimes depending on their underlying technology:

• Custodial, where the administrators of the infrastructure control NFTs of users
  by holding their keys, allowing them to execute transactions or freeze them at
  any time. These types of NFT marketplaces can be subject to the VASP regime, if it is established.
• Auctions, where transactions (auctions) with NFTs are organized centrally and fees are collected from successful bids. Those will most likely fall under the e-commerce regulation of auctions and require a different license.
• Non-custodial, where users own and hold private keys and are able to perform transactions with NFTs at any time. This last type of NFT marketplaces can normally operate without a special license.

NFT marketplaces vary depending on the traits of NFTs sold

• Universal, where any–or almost any—NFTs could be sold. Examples of universal marketplaces include OpenSea, Rarible, and SuperRare. 
• Specialized, where all or the majority of NFTs sold are dedicated to a certain project or theme. Examples include Axie Marketplace, which is dedicated to the Axie video game and NBA Top Shot, which is solely dedicated to NBA events. 

NFT marketplaces could be also classified depending on payment method (only virtual assets or virtual assets and fiat currencies) their place in project (independent marketplaces, such as OpenSea or Rarible, or in-project marketplaces, the examples of which are Axie Marketplace, Binance Marketplace, Crypto.com NFT), etc.

Where to establish an NFT marketplace

When structuring an NFT marketplace, several points should be considered, from securities to intellectual property regulation. As a general practice, NFTs are not typically considered as security in most jurisdictions (there are, of course, certain exceptions). Consequently, Web3 entrepreneurs looking to launch an NFT marketplace have a wide and decent selection of jurisdictions to choose from.

Common law jurisdictions tend to be a popular choice for establishing NFT marketplaces.  This is because common law jurisdictions tend to offer the necessary legal flexibility, including, but not limited to, regulations concerning intellectual property. These jurisdictions are also frequently considered reputable for launching these types of Web3 projects. Taking into account the latest best practices for choosing where to establish an NFT marketplace, the following jurisdictions might be considered:

• The United States of America (currently home to OpenSea, Blockparty, Rarible, SuperRare, Foundation, Mintable, Magic Eden, and MakersPlace); 
• Canada (NBA Top Shot); 
• Hong Kong (Crypto.com NFT); 
• The United Kingdom (KnownOrigin);
• The Cayman Islands (Axie Marketplace);

Future development of regulation affecting NFT marketplaces 

There are many kinds of NFT marketplaces with their own special features and characteristics and this area of Web3 is rapidly developing, creating its own trends, popularizing its own stars and building a big business niche. In light of this ongoing and substantial development, it is likely that in the future, further regulation will be implemented.

One noticeable transformation happening in the world of NFTs is the shift away from NFTs solely serving a community of software enthusiasts and now catching the interest of big business. There is potential, therefore, of further regulation development to occur in this wealthy market, especially in terms of anti-money laundering. Examples of regulation already emerging include the so-called Fifth Anti-Money Laundering Directive issued in 2018 from the European Parliament, which has extended its applicability to “virtual currencies” and “persons trading or acting as intermediaries in the trade of works of art”, although it does not contain the specific regulation of NFT trading. However, in September 2020, a proposal on markets in crypto-assets was adopted by the European Commission, which could potentially apply to the NFT marketplaces in the future. 

Written by Taras Zharun, Web3 Virtual Legal Officer at Legal Nodes

For the second consecutive year, Vietnam is ranked first in cryptocurrency adoption. On the second line is the Philippines, and Ukraine closes the top three.

As Mykhailo Fedorov, Minister of Digital Transformation of Ukraine, noted, the government works a lot on the development and legalization of the crypto industry in Ukraine.

In particular, in March 2022, President Zelensky signed the Law of Ukraine “On Virtual Assets”. The document defines the concept and legal status of a virtual asset, ownership rights, and terms of transactions with such assets in Ukraine. The law allows launching a legal market for virtual assets in Ukraine and bring cryptocurrencies out of the shadows.

“We want to create the most favorable conditions for the development of crypto business in Ukraine. So that global crypto companies can legally enter Ukraine and do business using the banking system. And Ukrainians — declare and protect their income in virtual assets,”

Mykhailo Fedorov writes.

In September 2022, Kyiv Tech Summit Web3 hackathon was held in Kyiv. Vitalik Buterin, one of the creators of the Ethereum cryptocurrency, came to visit the event. He emphasized that Ukraine has a very strong Web3 community and can definitely well become the next world’s Web3 hub.

• UACB allows investing cryptocurrency in tokens secured by war bonds with a government guarantee of return on bonds with all the benefits of blockchain technology.
• The first issue of crypto bonds was made small. The organizers wanted to test the degree of interest from a new category of investors in government debt and to demonstrate the potential of the new law on virtual assets.
• UACB is settled in Tether (USDT), a cryptocurrency pegged to the dollar exchange rate.
• After the government pays off the bonds, UACB can be exchanged back into invested USDT. UACB buyout is scheduled for November 2022.

“As all settlements are made in USDT, UACB helps avoid currency risks during exchange rate fluctuations,” commented ICU Deputy Director Yevgeniya Gryshchenko.

ICU Group is an independent multi-strategy asset management private equity and investment firm specializing in emerging and frontier markets worldwide. The Group also makes venture capital and fintech investments through its venture capital arm, ICU Ventures.

EVOL.TECH is a Ukrainian tech company specializing in the creation of Neobroker and RoboAdvisor projects designed to facilitate investments in foreign securities and cryptocurrencies.

More articles about Web3 legal issues you can read in Legal Nodes blog.

Regulators qualify all the businesses we cover here as Virtual Assets Service Providers (VASPs). VASPs include crypto exchanges, wallets, DeFi (decentralized finance), NFT (non-fungible token) marketplaces, play-to-earn games, and other crypto businesses. Certain regulators have already developed special regulatory modes for VASP.

The most crypto-friendly countries to register a new crypto business in 2022

How to choose a crypto-friendly country for crypto exchanges and DeFi

All cryptocurrency exchanges can be divided into centralized and decentralized ones. Centralized exchanges store users’ virtual assets centrally and administer the cryptocurrency trading process on their platforms. Decentralized exchanges are those based on a smart contract that does not provide for centralized storage of cryptocurrencies but instead independently changes one cryptocurrency to another under the rules laid down in the smart contract and following the trading orders that users create.

In most countries, the operation of centralized exchanges requires obtaining special licenses or authorizations. Such licenses can be divided into two categories; general fintech and special cryptocurrency licenses. General fintech licenses include:

• the Money Transmitter License in the United States
• the EMI (Electronic Money Institution) License in England and Lithuania

Special cryptocurrency licenses include:

• A DLT (Distributed Ledger Technology) license in Gibraltar
• Registration in the IDGM zone in the UAE
• Obtaining authorization from financial monitoring authorities in Canada and Estonia

Obtaining a general fintech and a special crypto license requires several steps, including preparing a business plan, conducting a technical audit of the system that will store users’ assets, and implementing proper financial, AML (anti-money laundering), and privacy compliance.

In countries such as the United States, DEXs (decentralized exchanges) were recognized as financial companies and, in their legal status, were equated with centralized crypto exchanges. DeFi projects (staking, yield farming, crypto lending platforms, etc.), which regulators recognized as financial services, also fall under the same qualification.

That is why today most DEX with DeFi elements are registered in countries where there is no regulation of this type of service (for example, in the British Virgin Islands and in Bermuda) or are launched in the form of DAOs with appropriate legal wrappers (for example, a Cayman Islands foundation).

Registering crypto wallets: what you need to know

Crypto wallets are divided into custodial and non-custodial wallets, depending on the principle of operation. Custodial wallets are those whose providers store users’ virtual assets in their wallets, controlling the private keys to these wallets. Non-custodial wallets allow users to independently generate a private key and fully control their virtual assets on the wallet.

Because the providers of such wallets fully control users’ virtual assets stored on custodial wallets, such providers in most countries are required to obtain special authorizations from financial monitoring authorities (for example, the Financial Intelligence Unit in Estonia, the FinTRAC in Canada, and the Bureau of Fraud Investigation in Ireland).

Registration of a custodial wallet with a financial monitoring authority requires the wallet provider to appoint an AML officer in the company, implement KYC (know your client) procedures for clients, and enable AML analysis of transactions that pass through wallets for their affiliation with sub-sanctioned blockchain wallets (darknet wallets, crypto mixers, etc.).

As for non-custodial wallets, there are currently no separate regulatory requirements. Some of the providers of these wallets have introduced the possibility of the token swap; the ability to automatically exchange one token for another. You need to be careful with this function, as regulators of certain countries can recognize it as providing services to exchange some virtual assets for others. Therefore, if the team plans to launch a wallet with a token swap function, this function must be properly legally structured and described in the Terms & Conditions of the crypto wallet.

Choosing a country for NFT marketplace registration

Today, in most countries, NFTs are qualified as digital goods, and their “non-interchangeability” property allows them to equate their legal status with collectible goods.

The main criteria for choosing a jurisdiction to register an NFT marketplace is its business model. If the marketplace’s operation involves an auction format (commission business model), you will need to obtain an auction license/authorization to operate in the country of registration.

Suppose the NFT marketplace receives IP-related income (earns royalties at the time of resale of the NFT). In that case, it’s essential to choose an IP-friendly jurisdiction that has special tax regimes for IP-related income. It is worth considering Switzerland, the Netherlands, and Cyprus, among other countries.

What to consider when launching play-to-earn games

At the time of the introduction of NFT and DAO, many game developers began to think about how implementing tokenomics in-game mechanics could help increase player engagement and motivate them to spend more time in games. As a result, play-to-earn games started to appear.

The business model of such games usually consists of two parts: minting of NFT and earning in-game currency, for which in-game purchases are possible. The legal aspects that arise in connection with the minting of NFT in play-to-earn games and their subsequent sale on the gaming marketplace are the same as for NFT marketplaces.

A slightly more complicated situation is with in-game currency. Suppose the game developers plan to give in-game currency liquidity outside the game (for example, make it possible to trade it on 3rd party platforms) and equate the currency’s value to the dollar (or other fiat currency). This in-game currency could be recognized in some countries as electronic money and therefore require a special license.

To choose a jurisdiction for a play-to-earn game, you should take into account two criteria:

1. Whether you need to have the ability to accept payments in cryptocurrency. Countries that have regulated this include Switzerland, Singapore, Hong Kong, and the Cayman Islands. 
2. Whether you need to have the ability to issue your own token. You can learn more about how to choose a country for launching your token here.

Get started by choosing the right country

Today, new types of crypto businesses are appearing all the time, around the world. The business models for these crypto businesses affect–and therefore must be aware of–financial laws, securities laws, consumer protection laws, and even VASP-specific legislation already passed in some countries.

To launch a VASP without risking a law violation, it is necessary to acknowledge the legal aspects of the business model, take care of any required licenses/authorizations, and implement compliance procedures.

Written by Nestor Dubnevych, co-founder and COO of Legal Nodes

This bill was revised several times and returned to the President with proposals at the final stage. On February 17, Verkhovna Rada finally passed the law.

What happens next?

The Ministry of Digital Transformation explained what сhanges the final version of this law would bring:

• foreign and Ukrainian cryptocurrencies can now operate legally;
• banks can open accounts for crypto companies;
• Ukrainians will be able to protect their virtual assets savings;
• the state guarantees judicial protection of rights to virtual assets.

The National Securities and Stock Market Commission will act as the regulator of the virtual assets market in Ukraine. The authorized regulator will:

• formulate and implement policies in the virtual assets sector;
• determine the turnover order of virtual assets;
• issue permits to virtual asset service providers;
• carry out supervision and financial monitoring in this area.

“This is another important step towards de-shadowing the crypto sector and launching a legal market for virtual assets in Ukraine,”

the Ministry of Digital Transformation notes.

Market players’ reaction

Market players are positive on the law.

“Thanks to this law, any market operator will be able to provide a wider range of services. Additionally, they can fully integrate their services with government and banking institutions. This will help attract innovative projects, global giants, and promising local cryptocurrency startups to the Ukrainian industry. Ukrainian traders will be confident in their assets safety, provided at the legislative level. Regulation of this industry is a very important step for Ukraine as a progressive and European state,”

Sergei Zhdanov, CEO of the international cryptocurrency exchange EXMO comments on the law.

The platform accepts donations in Bitcoin (BTC), Ether (ETH), Tether (USDT), Polkadot (DOT), Solana (SOL), Dogecoin (DOGE), Monero (XMR), Icon (ICX), and Neo (NEO). Thanks to the cooperation between Aid For Ukraine and FTX, the received donations will be converted into fiat money and transferred to accounts of the National Bank of Ukraine.

As of March 15, people have already donated over $48.5 million via Aid For Ukraine.

• Ukrainian company 4ireLabs has released an NFT collection to raise funds to support the Ukrainian army. It is a NEAR blockchain-based collection that is designed for its community. NEAR charges a low commission of up to one cent.
• The collection consists of 20 NFTs. All of them are concerning the topic of Russian invasion, fight for Ukrainian freedom, and peace.

• Furthermore, the founders and participants of Ukrainian and foreign crypto projects created the Unchain Fund. It focuses on humanitarian aid.
• Illya Polosukhin from NEAR is among the fund’s founders, along with Dmytro Budorin from Hacken and Andriy Velykyi from Allbridge.
• The Unchain Fund accepts cryptocurrencies and fiat money. It coordinates humanitarian aid, helps to evacuate people, and supports civilians.
• You can join and support the fund via the website, Telegram, and Discord.

UPD 13:30.

The forces of Cyber Police of Ukraine initiated the first NFT-project against the Russian invasion.

• The charity NFT-project is called “RUSSIAN SHIP — FUCK YOU”.
• All funds raised from the sale of the NFT collection will be donated to support the Ukrainian army and provide charitable assistance to Ukraine, Cyber Police reports.
• The collection can be accessed via OpenSea, the largest NFTs marketplace in the world.

You can buy NFTs from the collection — here.

What does the law provide?

The document defines the concept and legal status of a virtual asset, ownership rights, and terms of transactions with such assets in Ukraine. As reported by AIN.UA, after the President’s signature, the following changes will take effect:

• Cryptocurrencies will receive legal status.
• Market participants will have the right to legal and other ways to protect the rights to virtual assets.
• International exchanges where virtual assets are traded will be able to operate legally in Ukraine. However, to do so, they (as well as other providers of services related to the circulation of critical currencies) will have to register in Ukraine and submit reports on their activities to the competent authorities.
• Financial monitoring of the virtual assets market will be carried out in accordance with the recommendations of the FATF (Financial Action Task Force on Money Laundering).

“The new law is an additional opportunity for business development in our country. Foreign and Ukrainian crypto companies will be able to operate legally, and Ukrainians will have convenient and secure access to the global virtual asset market. Market participants will receive legal protection and the opportunity to make decisions based on open consultations with government agencies. There will be a transparent mechanism for investing in a new asset class,” says Mykhailo Fedorov, Minister of Digital Transformation.

It should, however, be noted that it is a framework law. That is, it does not provide for specific mechanisms and procedures for dealing with virtual assets but only defines them. And practical application thereof will be detailed in by-laws.

What changes has the President made?

The initial version of the law, adopted by the Verkhovna Rada in the second reading in September 2021, provided for the creation of a new institution, the National Virtual Assets Regulatory Service (NVARS), which will issue permits to crypto companies to operate in Ukraine and regulate the virtual asset market.

Now, according to the changes, the National Securities Commission will regulate the market of virtual assets. Among other things, the commission will:

• Formulate and implement a policy in the field of virtual assets.
• Determine the order of turnover of virtual assets.
• Issue permits to virtual asset service providers.
• Carry out supervision and financial monitoring in this area.

At the same time, the team of the Ministry of Finance continues to work on appropriate amendments to the Tax and Civil Codes of Ukraine to kick off the market of virtual assets fully.

“Today, the potential of the global crypto industry is determined by billions of investments. Its growth rate is ahead of traditional sectors of the economy. In Ukraine, the virtual asset market can become a powerful digital economy sector. Thanks to the adopted Law, we have every chance to become a leading country for business development in this innovative field,” says Oleksandr Borniakov, Deputy Minister of Digital Transformation for IT Development.

What market players say

The world’s largest cryptocurrency exchange Binance is optimistic about the legislative changes.

“Binance congratulates the entire cryptocurrency industry on the adoption of the law on virtual assets. It is a massive step for the whole market. Currently, there is a global transformation in the field of cryptocurrency regulation, and it is nice to see that Ukraine is taking such a progressive position on the issue.

Ukraine has become a country where virtual assets have acquired legal status. This step creates a vast market, which will now operate legally, and the country will become even more attractive to investors, crypto companies, and users,” comments Kiril Khomiakov, General Manager of Binance in Ukraine.

The law will allow cryptocurrency owners in Ukraine to legally exchange assets, file income earned from cryptocurrency transactions with tax returns, start blockchain businesses, and use cryptocurrencies in their daily lives.

“At Binance, we particularly welcome the fact that Ukrainian cryptocurrency users are now protected from cryptocurrency fraud and crime by law.”

He also noted that the law is based on the world’s best practices and will contribute to the de-shadowing of the cryptocurrency market.

• NEAR is a blockchain for creating decentralized open-source applications that offers developers and users a much faster experience and a thousand times lower fees than other blockchains such as Ethereum or Bitcoin.
• The project is expected to become a platform for the easy and cheap creation of decentralized services for any activity: from finance and security to social media and organization management applications. At the same time, for users, the use of such applications will not differ from the usual centralized services because NEAR Protocol and the developers of each application do all the work.
• NEAR was founded in late 2018 by Alexander Skidanov from Russia and Illia Polosukhin from Ukraine as a response to alternative blockchain networks, which require users to have a high level of technical expertise, making it difficult for ordinary people to use them, and transaction fees of tens of dollars.

AIN.Capital’s journalist talked to one of the founders of NEAR Protocol, Illia Polosukhin, about what his project offers developers and users and how it will help create a truly decentralized Internet.

What is NEAR Protocol?

Basically, NEAR Protocol is a platform for developers that allows the creation of decentralized programs. We try to solve several problems, and our motto is “simple, secure, scalable.”

The platform is easy to use for both developers and end-users. It is economically and cryptographically secure, and can quickly scale with the growing audience, number of users, and number of applications.

How do developers and end-users benefit from using NEAR Protocol?

We live with the choice of being in one of two realities. Either we will find ourselves in a world where large corporations control everything, most likely two or three at most, and they will feed the information directly to our brains and tell us what to do, or we will find ourselves in a world where everything is built on open technologies and, accordingly, all data, all money, everything belongs to users.

To have the second option, you need a so-called protocol to make some programs, market systems, for example, those that are not dependent on centralized companies and are not controlled by them. You need to be able to communicate with different users, programs, and computers so that they can work together.

The blockchain itself is a way to create protocols. It is a tool that allows you to easily develop new protocols for communication between different agents. On the blockchain, you can build things like markets and new economic instruments, and it allows you to record what someone owns and so on. In addition, the blockchain allows you to create new types of organizations that work on entirely different principles than the usual ones: companies, non-profit organizations, and the Facebook community. These are the opportunities that the blockchain currently provides.

And the problem that was before was that this system was not scalable and expensive to use, i.e., only those who could pay could use it. And the difficulties in using it: you need to understand the blocks, hashes, private keys, etc.

We try to tackle all these issues and provide people with a tool. NEAR developers can write programs whose users do not have to think about all these blockchain nuances, implementations, and other hassles. They can buy and use the product. We create development solutions that allow them to make simple products for their users.

How is the NEAR Protocol currently used?

I just mentioned a new type of organization. There is, for example, AstroDao with the idea of allowing any group of people to create their own organization, let’s even call it a cooperative. And this cooperative can manage some of its resources, make decisions, invest, accept money, pay salaries, and so on.

In principle, this is no different from the fact that you can go and form a company, but there is an opportunity to change the rules. You can tell us what decisions we make together, what decisions I make separately, how much money everyone can pay independently.

And most importantly, it is global. It is not a company of a particular country but a global system because we now live in a quite global world. So, for example, we have a meeting with colleagues from 3-4 countries. And we need to decide in which country to incorporate our organization and what exactly to do with it: shall we establish a non-profit or some kind of association?

It is amazingly easy to kick off with our protocol. And it costs about $5 to create and fully deploy anything. The user has to have bots in popular applications, such as Telegram or Slack, and with their help, they can fully manage their company. And such a company can grow — you can add new people, new types of roles, etc. That is an example of a program that is already written in NEAR.

There is another example: the creation of global marketplaces. One of the cases that prompted us to create the NEAR Protocol is the process of creating artificial intelligence that we once worked on. That project required data. For that, we gave tasks to people around the world, and they solved them, and we used this data to teach our artificial intelligence.

Back then, I worked at Google and had millions of dollars allocated for such tasks. And Google had a specific service that made payments to such people. But when we started setting up the same process, it turned out to be exceedingly difficult to pay people all over the world. We had people from China, Russia, Ukraine, and even Cuba. And it is problematic to send money to all these places from America.

And we viewed the blockchain strictly as a platform for sending money. And then someone in the community saw that idea and wrote a platform, now called NEAR Crowd, that currently employs 2,000 people globally to do the job. It is an open platform, an open marketplace. Anyone can come, take part in these processes, and earn money.

NEAR Protocol is about globality, the possibility of open participation, the possibility of creating economic parameters. The more interesting is the ownership, the idea of which is currently being developed. That is the ownership of the platform by the users and employees of this platform. They will receive a percentage of the future success of this platform and, accordingly, can participate in decision-making.

What is the role of the token in the development of the project?

Because NEAR is a Layer 1 blockchain, it needs protection. In the sense that the data itself, the performance of this system itself is protected by the fact that there are a number of computers, nodes, so-called validators that put their NEAR tokens on to make them work properly.

They say: “Here is $1 million in NEAR tokens, I will do the correct work. If you can prove me wrong, you can take the money from me. But if I am right, I’ll earn some more tokens on top of the work I did for the network.”

It is similar to how miners mine Bitcoin, but they don’t stake their own money. Instead, they spend more time looking for hashes to solve puzzles. And accordingly, if they try to do something wrong, they will simply lose that time. We are trying to optimize energy consumption and make the optimal system as a whole. So, the stake of validators here is NEAR tokens.

Currently, we have about 400 million NEAR tokens staked, which corresponds to billions of dollars, which ensures the security of the system itself. It takes billions of dollars in non-tokens to try to attack one and do something to it. It is clear that this is costly and difficult to implement.

Second, payment for transactions and data storage on the blockchain also takes place in NEAR tokens. So, if we take Amazon as an example, Amazon’s servers would stake the token, and users and developers would pay in NEAR tokens. But this condition is at the protocol level, and on top of that, you can add a payment in any other currency, which will be ultimately converted to NEAR.

In addition, the NEAR token is involved in all financial transactions, all new programs released on NEAR are released with a market that runs on NEAR or sell their tokens for NEAR tokens.

What does NEAR Protocol benefit from the scaling concept? Is this the way to decentralize everything and Web3?

Yes, our vision is Web3. In a global sense, Web3 is an open alternative to a world where centralized companies run everything. I also call it an open Google. I worked at Google, and everything there is quite open inside: if you are inside the company, you have all the services, all the teams and the code is open, all the services are open, and so on. But that is only if you’re inside and have all the Google users, and you can launch a new product for them.

But firstly, it is a kind of filter “who can participate in it.” Secondly, one economic model of the company connects all this. And here, we look at it as an open system with a common lining. A common platform, NEAR, and you can build a vast number of applications on top of it because they can interact with each other because of the shared infrastructure and the open paradigm in general.

At the same time, they all have their own economic models. That is, they are all guided not by the decisions of company leaders but by the market economy. That is, they have their own economic model. An excellent example of that would be Aurora, a project that was actually started by the guys who worked with us at NearInk, but they have now joined a separate team, and now they also have their own token. They are built on Near. They provide additional services and have long passed the stage of a unicorn startup.

So, the idea is this: many separate services, protocols, and applications are built on one system. They are all connected, there is intercommunication between them, and simultaneously, as a user, I manage my data and participate in management. And due to the fact that this is my data, I can get into any application, and it can connect to them.

The simplest example is a social graph: if I go, for instance, to Facebook, there is one social graph, and if I go to LinkedIn, there is another social graph. And if the Web3 social graph was mine, my friends, I’d get into any application and see my friends there. And the same applies to money. Any program I get into has my money. I see my money, and I can do something with it.

Here is an example: DeFi (decentralized financial services, ed.) already exists. Wherever you go, whatever exchanger you use, there is your money, you can exchange it for something else or deposit it or do something else. And it all works together because it is under one infrastructure, under one cover.

Speaking about scalability, we assume that we have such an infrastructure, an open ecosystem, and millions, ideally billions of users are starting to join it. To accomplish this, the infrastructure must be able to scale. Google employs tens of thousands of people, hundreds of data centers, and millions of computers to do this. And we need the same infrastructure.

Currently, all existing infrastructures, such as Bitcoin, Ethereum, etc., are now single-computer systems. That is, each computer in the system must check everything, so the performance of the entire network is limited by how much one computer can do. Then comes the market economy. If we have a limited amount of possible work, then the one who pays more can access it. Those who are not willing to pay more have no access. Prices are rising.

So, what we do is we scale it. It is what Google, Facebook, Amazon, and others are doing. The idea is that as the number of users and the number of transactions increases, we will add more and more computers to the system and parallel the execution process. In this way, we will increase transaction capabilities.

It is a rather complex development. Ethereum has been trying to make it since 2014. They said they wanted to do it, but not everything is clear so far. So, it is necessary to do everything based on this concept from day one.

Was this scalability and path to WEB3 originally conceived when creating the NEAR Protocol?

Yes, when we first started, we looked at Ethereum, which then cost $0.20 per transaction, which looks cheap compared to the current $20-50 but is actually still expensive considering that we paid people $0.15 per task. And we went looking for alternatives and realized that no one was building scalable alternatives.

That was our first push: we wanted to make a scalable system because we came from such systems. My co-founder worked at Microsoft on creating SingleStore, a database provider. And it was strange for us to see systems without the possibility to scale.

How is the project developing now, and what are the goals and plans?

Currently, we are working on a few areas: we continue to improve the protocol because we cannot say that the work on it is over, and we are developing the ecosystem around the NEAR Protocol. We have been up and running for about a year and already have over 200 applications, almost 2 million users, but we are still very far from a fully deployed ecosystem. Accordingly, we have a lot of work to do, and we need to dedicate countless investments and help to develop the ecosystem.

We recently announced that we have $800 million to invest in the ecosystem. These are financial proposals, grants, and investments, including in specific regions. For example, in Ukraine, we have regional hubs that help invest in local startups. We hold hackathons, where we recruit specialists, help them create programs, and develop their ideas. Now we will help those who have made exciting programs with their launch and development.

A lot of work is done in this direction, growing the ecosystem, attracting specific applications that will attract their users, and connecting it all.

Users of such applications will also be users of the NEAR Protocol, even if they do not know the details of the project, won’t they?

On the one hand, that is correct, but on the other hand, they are more likely to be common. This is an interesting point. For example, there is Google Drive and Google Play. On the one hand, they can both attract their users, but they have a common Google login, so users become shared in a sense and move between applications.

We also have connections between applications: if you use one where you already have some resources, you can easily use the other. Therefore, the more programs attract their users, the greater the use of other programs on the same platform. A very strong network effect is taking place here.

Why Ethereum, despite being so expensive and terribly slow and exceedingly difficult to use, has such a high market value? Because even with a small number of users and a relatively small number of applications, compared to the App Store, for example, it still has a robust connection between these applications, and so many financial transactions can be done, making it practical.

So yes, our goal is to create as many highly connected application components as possible that together help build the ecosystem and engage users.

• Ramp was founded in Warsaw in 2017 by Szymon Sypniewicz and Przemek Kowalczyk. Describing itself as a PayPal of crypto, the startup builds crypto payments infrastructure that allows users to exchange fiat money such as US dollars for cryptocurrencies easily — the so-called on-ramping, as well as to pay using crypto.
• In 2020, Ramp became the first crypto company to receive an open banking license in Europe and approvals for operating in the UK and the US legally, Sifted writes.
• The record-breaking Series A was led by London fund Balderton Capital and came six months after Ramp completed its $9 million (37 million zloty) seed round. This time existing investors NFX, Galaxy Digital, Seedcamp, Firstminute Capital, and some business angels joined the round.
• To date, Ramp works with over 400 partners, including the Opera browser, the popular NFT games Axie Infinity and Sorare, Dapper Laps (creators of CryptoKitties and NBA Top Shot), Trust Wallet, and Argent.
• The startup will spend the proceeds on further expanding the team — from 80 to 300 specialists by the end of 2022, as well as acquiring more partners.

How to buy bitcoin in BUYBank

All-Ukrainian service of digital assets exchange BUYBank invites beginners and experienced crypto-traders to cooperate. It is possible to buy or sell bitcoin online with a Visa/Mastercard card issued by any Ukrainian bank. To do this, go to the official website of the service and select the desired option in the list. Fill the appropriate fields in the calculator, initiate the exchange, and the transaction will be made as quickly as possible. Thanks to an intuitive interface and information about fluctuations in exchange rates over the past day and week, it is easy to make a profitable exchange of cash for bitcoin: the clients don’t even need to call a manager. The advantages of the BUYBank online exchange do not end there: registered customers can participate in the referral program and receive additional bonuses.

In case you want to exchange bitcoin for cash, you need to visit one of the offices of the company. The main branch of BUYBank is located in Kyiv at 45 Antonovicha street. Also, there is a recently opened branch in Odesa. You are allowed to carry out operations with cash in other regional centers: you can get detailed information from managers, as well as support service by phone or via Telegram chat. If you want to buy bitcoin with cash, the procedure is as follows:

1. Discuss the details of the exchange with the manager, specify the amount and currency of payment (this can be done in advance via Telegram-chat). 
2. Pay for your purchase at the cash desk. 
3. Immediately after the payment, bitcoins will be transferred to the specified cryptocurrency wallet.

There will be no problem with bitcoin exchange for cash either. The BUYBank manager will give you the details of the BTC wallet to which coins should be transferred. After sending the stated amount, you need to wait for the network’s second confirmation which takes about 20 minutes. Then, the money will be issued through the cashier of the exchanger. The branch provides an opportunity to exchange bitcoins for UAH and USD.

Advantages of bitcoin exchange in BUYBank

The market of digital currencies is rapidly developing. Planning to exchange bitcoin for USD or UAH, crypto investors make a confident choice in favor of reliable exchangers. BUYBank is one of the leaders in the market of Ukraine. It is a large-scale and modern service, working with BTC and many other popular crypto-assets. Among the advantages of the company you will find:

• Convenient and comfortable exchange. Both in the online format and when visiting the office in Kyiv or Odesa, the client can count on a high level of service. 
• Confidentiality, reliability, and safety. The service doesn’t disclose information about transactions, doesn’t request documents, and uses SSL protocol with 256-bit encryption to ensure transaction security. 
• Client focus. The exchanger offers high-quality services, which is confirmed by statistics: 95% of traders who perform an exchange at the site or office become regular customers of the company later.
• Online information support. On the buybank.io website, you can find all the relevant information concerning changes in the bitcoin exchange rate, which will help you make timely and correct decisions about the necessity of exchange.
• Accessibility. Any resident of any region of Ukraine can initiate transactions and sell or buy bitcoin.

All of the above makes BUYBank an attractive service for cryptocurrency transactions. The key aspect is active work with cash: most clients prefer this safe way. The office staff will answer all the questions, dispel the doubts of inexperienced crypto-traders and give advice on how financially sound and profitable the planned operation is.

Why you should buy bitcoin

The prospects of the first cryptocurrency are quite promising. It is present in the portfolios of the world’s major funds and investment companies. In October 2021, the asset experienced a sharp rise: its quotes broke the historical record and crossed the $67,000 mark. According to analysts, the upward momentum will stay until the end of this year, and the long-term trend is unambiguously upward. Moreover, the interval between growth cycles is getting smaller.

Many investors prefer to keep coins in a cryptocurrency account and wait for the asset’s further rise in price. If you decide to convert profits into fiat money or, on the contrary, want to invest funds in digital currency, choose BUYBank exchanger. The company guarantees fair and profitable exchange, acting as a reliable financial partner of Ukrainian crypto traders.

• Global Ledger has signed a strategic M&A partnership with Promethiem AG, a Swiss fintech group. The agreement secures a $3.5 million financing for the startup and access to new markets.
• The startup was founded by Alex Fisun and Dimitrii Bilokon and facilitated by IdeaSoft (member of Sigma Software Group) business incubator. The startup team is working on a fintech solution that makes it easier for banks and cryptocurrency exchanges to work with cryptocurrencies. Specifically, the service helps:
  • Monitor and prevent AML/CTF risks in real-time
  • Perform extensive due diligence procedures on entities and individual accounts
  • Collect all needed information for suspicious activity reporting in seconds\
  • Lead investigations on money laundering in crypto
  • Integrate with your current AML/CTF processes

“When it comes to working with cryptocurrencies, the banks’ main fear is the lack of opportunity to check where the money comes from. Global Ledger solves this problem and opens the doors for the banks to finally get their piece of the huge cryptocurrency market,” says Hanna Khrystianovych, Fintech Program Manager at Sigma Software.

Today Binance closely cooperates with the Ukrainian government to make this industry more transparent and safe both for investors and companies. The biggest crypto exchange grows its activities in the country — in particular, Binance held its first offline meetup in Kyiv for a couple of thousand attendees.

AIN.UA talked to CZ about the Ukrainian Binance community, legislative initiatives, and collaboration with the government. He also shares his preferences in crypto for today and personal investment strategies.

In September, the Ukrainian Parliament accepted a new law regarding virtual assets, effectively legalizing cryptocurrencies in Ukraine. What do you think about this legislative initiative? How will it affect the crypto industry not only in Ukraine but in general?

Regulation is essential for the crypto industry and will go a long way towards building trust with consumers and institutions interested in the space. However, it’s just as crucial for regulation to complement instead of hinder crypto’s growth. 

Effective regulations safeguard consumers while stimulating growth and innovation, while poorly crafted regulatory policy stifles growth and protects dated ineffective processes and institutions. 

I think Ukraine is moving in a very positive direction. All regulation initiatives bring the cryptocurrency industry to the legal field and a new level. The law’s adoption will enable asset classification, legal operation for crypto organizations within Ukraine, and users will be able to declare their digital assets and pay taxes on their profits. 

I also believe the law will attract additional capital to the country, foster a thriving crypto community, and help bring blockchain to the mainstream — all of which will have a positive effect on the Ukrainian economy. 

For Binance, it opens up new opportunities for expansion, growth such as partnerships from financial institutions to payment companies and much more. 

According to different research reports, Ukraine has one of the world’s most advanced crypto communities in terms of blockchain innovations and cryptocurrency adoption. Can you see confirming signs of that in user activity by region on Binance?

As one of the largest markets in Eastern Europe, Ukraine is most definitely a high activity region for Binance. Just recently, our Binance meetup in Kyiv gathered almost 2,000 people. So you can put two and two together; there is a massive community in cryptocurrency in Ukraine. 

Why it is important for Binance to collaborate with governments to regulate the crypto industry? How exactly do you participate? Will users benefit or lose from regulation? 

Regulators share the same mission with us, protecting consumers while encouraging innovation. The crypto market is young, and we want to see it evolve in a safe and responsible manner for its users. Increased regulatory scrutiny is a positive development for the whole industry. However, we fully expect bumps along the way as regulators work to find the most effective way to engage with the marketplace. We are committed to 100% compliance, globally, and all our teams have been working nonstop to achieve this. 

As industry leaders, we have the opportunity and will to lead by example and partner with regulators to move shared objectives forward. We are the largest crypto exchange because users trust us. We earned that trust through many decisions and actions that protected users. We want to share our best practices with the industry and regulators all around the world. We believe this will help shape a healthier industry.

As part of efforts to meet compliance with all local regulation guidelines, we’ve recently launched new products — such as Shyft Network’s Veriscope to Support FATF Travel Rule Compliance and our Tax Reporting Tool API so users can quickly meet their personal tax obligations — and reviewed our existing services, including updating Futures Leverage for New Accounts and restricting access to it in a number of markets and initiating a Mandatory KYC requirement across the platform.  

We’re also searching across the globe for top-tier talents with a strong background in compliance. We recently hired  Greg Monahan, former US Treasury Criminal Investigator, as our Global Money Laundering Reporting Officer (GMLRO) and Binance Singapore appointed Richard Teng, former CEO of Financial Services Regulatory Authority at Abu Dhabi Global Market (ADGM), as their new CEO, former GE and Edelman Communications Executive Patrick Hillmann as Binance Chief Communications Officer.  

As an example, in addition to the standard KYC/AML procedures, we recently began a push for industry players to be long term driven. We are pushing for longer unlocking schedules for founder tokens, from 2-4 years to 8-10 years. This is something that no regulators have asked for, but we believe it will help the industry become healthier.

What new or not so new blockchain projects personally inspire you and why? What possibilities do you see for investors and traders in those projects, tokens, or specific fields of crypto? 

Recent innovations have propelled GameFi into the mainstream, which is causing the industry to take a closer look at the area between blockchain gaming and DeFi. I personally see huge potential in Play to Earn Gaming Using NFTs (GameFi) in Decentralized Finance.   

I am also thrilled about Sports Fan Tokens. This is a new way for sports teams to engage their fans, and create mutual monetization mechanisms that didn’t exist before. I think this area has huge growth potential.

I’m one of those people who believe we live in a simulation and I believe the metaverse is going to be everywhere.  It’s possible — in the next 50 – 100 years, we’ll be simulating the reality we want to live in.

Can you share what assets you have in your own crypto portfolio and how often do you revise it? What is your investment advice for crypto fans for 2021?

I don’t give any financial advice — I’m too bullish about crypto (laughing).  

I personally still hold BTC that I bought in 2014, and all the rest are in BNB. For new investors, I recommend diversifying much more than I do and only invest in small amounts.

Crypto is highly volatile, and people should only invest with money they can lose.

As Protos says, the hamster crypto trader outperformed Bitcoin, the S&P 500, and even Warren Buffett’s Berkshire Hathaway.

How it works

Goxx’s trading office is his box. It is connected to a computer that allows the hamster to trade cryptocurrencies. The hamster chooses one of about 30 cryptocurrencies by running in his “intention wheel.”

He then goes through two tunnels — Decision-Tunnel BUY and Decision-Tunnel SELL. The buy tunnel purchases €20 of the selected crypto, and the sell tunnel liquidates the entire position.

The hamster live streams his trades live on Twitch. Also, he has a Twitter page and updates a thread on Reddit.

Despite the randomness of his trading tactics, Mr. Goxx has made impressive profits this month. Here are just some of his best trades:

• Chiliz (CHZ) bought for $23.60 sold for $36.44 (+54%).
• Pantos (PAN) bought for $23.57 sold for $35.33 (+50%).
• Dogecoin (DOGE) bought for $23.79 sold for $34.80 (+46%).

In some cases (due to the hamster’s current box setup), Mr. Goxx buys cryptocurrency and then immediately sells it, often losing a few cents. But overall, this hamster’s portfolio is performing better than bitcoin, the S&P 500, ARK Innovation, and even Warren Buffett’s Berkshire Hathaway.

According to the explanatory note to the bill published by the president of the Ukrainian Blockchain Association (UBA) and founder of the Kuna cryptocurrency exchange, Michael Chobanian, such a “privileged” taxation regime will work during the first five years.

What taxes for cryptocurrencies will be in Ukraine after the bill is voted?

The draft called “On the changes to the Tax Code of Ukraine regarding the virtual asset turnover taxation in Ukraine” contains several measures to support the development of the virtual asset market, including:

• VAT-free transactions with virtual assets and services of the virtual asset service providers;
• Low-tax regime (for 5 years) for the investment profit from the virtual asset transactions and services of the virtual asset service providers — only 5% of profit tax;
• Low-tax regime (for 5 years) for the investment profit from the virtual asset transactions for individuals — only 5% of income tax;
• Individuals shall pay 1.5% of the military duty from the investment income of the virtual asset transactions.

The bill also determines:

• The procedure for determining the object of taxation, declaration of relevant income/profits and the procedure for payment of prescribed taxes;The procedure for determining the object of taxation, declaration of relevant income/profits and the procedure for payment of taxes;
• What taxes will be for transactions with secured and unsecured virtual assets;
• And basic requirements to the accounting and bookkeeping of virtual asset transactions.

Why it’s important

First, according to this bill, you shall pay tax only from your profit. Until you keep your cryptocurrencies in the exchange accounts, you will pay no tax.

Second, as recently AIN.UA informed, on September 8, 2021, the Ukrainian Parliament has voted for draft no. 3637 of the Virtual Assets Bill. It regulates the industry of cryptocurrencies, and now holders of such assets will legally exchange and declare them, and international crypto companies may register a blockchain business in Ukraine.

However, according to transitional provisions, bill No. 3637 will take effect only together with another Bill “On the changes to the Tax Code of Ukraine regarding the virtual asset turnover taxation in Ukraine.” Because if the virtual assets will be taxed according to the current legislation, the whole industry would go into shadow, and specialists would emigrate from Ukraine to the countries with more attractive taxation regimes.

To avoid such a situation and legalize the cryptocurrency market in Ukraine, the bill prescribes a “light” taxation regime for the first five years.

In total, 276 deputies voted for this draft.

What will it regulate

The document defines the meaning and legal status of virtual assets, ownership rights, and terms of transactions with such assets in Ukraine. As AIN.UA reported, after the signing by the President, the following changes will come into force:

• cryptocurrencies will be legal;
• market players will be entitled to judicial and other ways of protecting virtual assets rights;
• entities in Ukraine will be entitled to operate international exchanges where virtual assets are traded. However, for this, they (like other providers of services related to cryptocurrencies) will have to pass state registration in Ukraine and submit reports on their activities to the competent authorities;
• the Ministry of Digital Transformation will be the regulator of the virtual assets market; in some cases, the National Bank of Ukraine and the National Securities and Stock Market Commission will also have the authority;
• according to the bill, there will be a new regulator – the National Virtual Assets Regulatory Service (NVARS), which will issue licenses to crypto companies in Ukraine;
• financial monitoring of the virtual assets market will be going under the recommendations of FATF (Financial Action Task Force).

“Cryptocurrency owners will get a number of advantages. Because there will be a legal base for cryptocurrencies, they will be able, at least, to protect their virtual fortune if something happens. They also will be entitled to exchange cryptoassets and declare them. This process will be completely “transparent.” In addition, we expect that there will be a real market of intermediaries allowing pay for goods with cryptoassets, store, and exchange them. So, there will be more options for their use,” told Alex Bornyakov, Deputy Minister of Digital Transformation for IT Development, to the Minfin tabloid.

Remarkably, it is a framework bill. So, it does not prescribe the mechanisms and procedures for actions with virtual assets yet — the draft will only give a definition and provide a legal base for them. Well, the actual application will be defined additionally in the bylaws.

As representatives of the startup said, they plan to launch the Weld Money card in Ukraine this October; and by the end of the year — in Europe and post-Soviet countries.

Pay with cryptocurrency at any store

The idea of the startup is that cryptocurrency holders can pay with a Weld Money cryptocurrency card for any purchase or service. The card activation has three steps:

• Fill out the form on the website and get a virtual card
• Using the Weld Money application, connect to this card via API any exchange with cryptocurrency
• Add a card to Apple / Google Pay

After that, you can pay for any online or offline purchases with a Weld Money card like a regular bank card, and the amount spent will be debited in equivalent from the stock exchange.

“At first, cryptocurrency was used by a rather narrow circle of tech-savvy people, and only for large transfers due to high transaction fees and many difficulties in withdrawing to fiat. We want to make crypto payment for the purchase of any good or service simple and convenient,” said Alexey Bobok, co-founder of the Weld Money project.

Weld Money will be available this October

It is planned that the Weld Money card will start working in October this year in Ukraine, and by the end of the year in Europe and the CIS countries.

“Weld’s payment solution is the best solution to the current market needs of users. We expect to get a significant part of the CIS payment market,” said Jonathan Poots, a spokesman for Magnus Capital.

Igor Mazepa, CEO of Concorde Capital, noted that in recent years, the company, in addition to the traditional investment banking business, has been developing as a private equity fund and is looking at various promising areas, including the cryptocurrency market.

“We are starting a new direction for ourselves with investments in the startup Weld Money. We see great prospects in this market. It is clear that, as in most startups, there are risks, but there is simply no point in denying that crypt has become a part of the new reality,” said Igor Mazepa.

• It is reported that Eric Balchunas found a post on a forum dated January 1993. In this post, programmer Hal Finney describes the technology of cryptocurrency trading cards, which is similar to the principle of modern NFT.

“After thinking a bit about the idea of ​​buying and selling digital money, I figured out how to present it. We buy and sell “cryptographic trading cards”. Crypto enthusiasts will love these fascinating examples of cryptographic art.”

Hal Finney

• Finney died in 2014 at the age of 58 due to amyotrophic lateral sclerosis.
• In 2021, the fortune of bitcoin creator Satoshi Nakamoto exceeded $60 billion. He may own from 750 thousand to 1.1 million BTC.

• The victim (his personal data is not disclosed in the court decision) has become interested in cryptocurrencies since 2016.
• In 2017, he met another cryptocurrency enthusiast who described himself as an expert in the crypto area in Kyiv. The victim and the “expert” concluded a verbal agreement on advisory services on cryptocurrencies.
• In June 2021, the victim decided to create a crypto portfolio of $631,500. They discussed the details of the transfer of funds and then continued to communicate on the subject via Telegram.
• The “expert” said that the funds needed to be transferred to his personal e-wallet using Tether cryptocurrency.
• At first, it was necessary to conduct a $100 test transaction in Tether. The victim did it. After that, the “expert” said that the entire amount needed to be sent. To do so, the victim gave the entire amount in cash to his friend, and the friend transferred it to the “expert’s” crypto wallet.
• As soon as the transaction was completed, the correspondence disappeared from Telegram, and the “expert” started to deny receiving the funds.
• According to the case documents, the transfer of money to the “expert’s” wallet can be tracked on the etherscan.io website. There is the equivalent to $631,500 on it now.
• The investigators believe that the “expert” thus stole the victim’s money.

Now the case is being investigated by the Investigative Department of the Holosiivskyi Police Office, under Part 3 of Article 190 of the Criminal Code (large-scale fraud).

However, it is unclear how the Court’s seize order concerning the crypto wallet will be implemented — the wallet can only be accessed with the help of its owner.

As reported by TechCrunch, the NFT will include access to the ownership transfer paperwork, a digital artwork by a well-known Kyiv graffiti artist Chizz.xr and photographs of the apartment. The auction will last 24 hours, with the initial listing starting at $20,000.

The transfer of ownership of an apartment as NFT 

Arrington has already signed legal documents drafted by Propy’s lawyers to transfer ownership to a prospective buyer. Currently, the apartment in Kyiv belongs to a legal entity from the USA. After the closure of the auction, the new owner of NFT becomes the owner of the legal entity and the property itself. This process will be repeated every time the real estate NFT will be resold.

“This NFT will go down in history. For Propy it is a major milestone in leveraging the promise of blockchain technology and non-fungible tokens (NFT) to achieve ‘self-driving’ real estate transactions and real estate participation in the decentralized finance economy,” Natalia Karayaneva, CEO of Propy, said. 

The auction starts on June 7 and will last 24 hours, with the initial listing starting at $20,000.

What will the NFT buyer get in addition to the apartment

The non-fungible token that the buyer will receive will include the following:

• documents on obtaining ownership of the legal entity, which owns the apartment now;
• NFT artwork by a well-known Kyiv graffiti artist Chizz.xr. The real artwork is painted on the wall of this apartment;
• photographs of the apartment.

The story behind the Kyiv apartment 

In 2017, the founder of TechCrunch Michael Arrington used Etherеum to buy an apartment in Kyiv. It was the first real estate purchase on cryptocurrency in Ukraine. The transaction was valued at about 212.5 ETH or $60,000 at the exchange rate at the end of September 2017. The transaction was also held through the Propy platform.

The parties concluded a smart contract before making a deal using blockchain. The smart contract address is displayed in the agreement, which is entered directly into the real estate register and the Etherеum blockchain.

In 2020, Ukrainian deputies declared 46,351 bitcoins. As of April 7, 2021, that is UAH 74.2 billion. Among the 791,872 officials who completed a tax return, 652 of them declared some cryptocurrency, as Opendatabot reports.

• In particular, most officials (61.1%) invested in Bitcoin. The second most popular cryptocurrency was Ethereum: 24.2% of public servants chose to invest in it.

11 cryptoassets of Ukrainian officials

• Bitcoin – 397 (61.1%)
• Ethereum – 157 (24.2%)
• Litecoin – 27 (4.2%)
• ADA – 18 (2.8%)
• Stellar – 18 (2.8%)
• Monero – 13 (2.0%)
• MIOTA – 10 (1.5%)
• Bitcoin Cash – 9 (1.4%)
• Bitcoin Gold – 1 (0.2%)

You will find the list of Top 5 Ukrainian officials by the reported amount of cryptocurrency below.

Notably, with every passing year, deputies tend to invest more and more in crypto. While in 2016, there were 25 known holders among Ukrainian officials, in 2020, there were 652 of them.

Most cryptocurrencies are held by officers of city and district councils, the National Police, and the Ministry of Defence.

Top 5 officials by the reported amount of cryptocurrency

5 Ukrainian officials, who are the richest men in terms of crypto assets amount, reported bitcoins exclusively.

• Vyacheslav Mishalov, member of the Dnipro city council – 18,000 bitcoins (more than $1bn);
• Petro Lenskiy, the Ministry of Foreign Affairs, – 6,528 bitcoins;
• People’s Deputies Oleksandr and Anatoliy Urbanskiy – 5,328 and 4,256 bitcoins;
• Member of the Odessa Regional Council, Volodymyr Kryvosheya – 3,493 bitcoins.

However, Opendatabot notes that the declared figures might not correspond to reality. Since cryptocurrencies have no legal status in Ukraine, it is impossible to trace their origin. Moreover, officials can use the declared investments in future to justify their illegal income: one can declare any number of bitcoins, without providing evidence of their actual existance.

Few people know that Trust Wallet was created by a Ukrainian, Viktor Radchenko. Today, he lives in Silicon Valley and operates Trust Vallet, which is part of the Binance ecosystem but remains an independent product.

In his interview with AIN.UA, Viktor speaks about his moving from Ukraine to the USA, working in the fishing industry in Alaska, becoming a programmer, and creating Trust Wallet, among many other things.

About the Binance deal

I was working at a mobile banking company. My friends were interested in cryptocurrencies, and I decided to try and take part in an ICO. I bought tokens, but when I wanted to receive them on my phone, it turned out that this could not be done. I am a mobile developer, and this seemed strange to me. Then I decided to create such a solution myself.

I created a mobile wallet and published it on GitHub so that anyone who needed it could use it. 

This was 2017, the ICO boom year. Trust Wallet became popular quite soon. Six months after starting Trust Wallet, I decided to quit my main job and dedicate all my time to the app.

The product was growing rapidly, but I had no money to expand the business. So, I decided to raise funds as everybody was doing it then – via an ICO. In the first private round we raised $5m and began planning an IEO on Cyber Network. 

At the same time, I was negotiating with Binance. At first, they considered the option to invest in Trust Wallet, but then it became clear that it would be much more convenient if the company just joined Binance. I met Binance’s founder and CEO Changpeng Zhao, and we settled the matter in one day literally.

I am a tech person, and I don’t feel like getting into operational issues. Rather, I am keen on the product: I enjoy coding, developing new functions, communicating with users. Binance made me a very interesting proposal: I would get full autonomy, would be able to work on my product and develop the company as I think fit, focusing on one thing only – making cryptocurrency more accessible. At the same time, I would not have to bother about raising investments, working with partners, and monetizing Trust Wallet.

Back then, we had not issued tokens yet. I returned money to the ICO investors and joined Binance along with my team.

I have remained in charge of the product and a shareholder in Trust Wallet. Binance attends to its own business separately, and Trust Wallet keeps moving the industry forward as an autonomous entity. An this makes sense. Binance aims to advance not only its own business but also the cryptocurrency industry as a whole. 

About life in Ukraine

My story began like everyone else’s did. I got my first computer at 15 or 16, maybe. I started playing games. But I found that games are not quite that exciting to me – I can play for a couple of hours at most. I enjoy watching somebody play more than playing myself. But I was curious: okay, I have virtual money in the game – how can I arrange for it to become more? I recall, when we played games, there was an application called Upmining. It allowed to find variables in a game and change them. For example, you could “make a fortune” in the game.

That’s where it all started. I became interested in how the software works in general, how it can be hacked, how the security of different systems works, and how it can be bypassed. The most basic things – how to hack Windows – this was where I began. Then I stumbled across various forums on the Internet that described security bypass techniques, and I began to delve deeper into it.

I entered the university in Dnipropetrovsk (now Dnipro) majoring in Security of Computer Systems and Networks. Sounds like fun, but it really wasn’t. When I reached the third year, it became clear that we had been studying the wrong thing. There were some basic subjects, half of which I skipped because I was not interested. 

At the same time, I was working at PrivatBank in the security department; online banking had just begun to develop then.

The funniest thing is that I don’t know math even now. All my life, I have been getting 2s and 3s in mathematics, and I am still quite good at programming. This is amazing because most often, programming is favored by people who do great in math and algorithms. And math was never easy for me: as a boy, I missed a lot of it at school and later struggled bitterly to catch up. At the same time, I just understand the principle – how these systems work, and I can create products.

Back then, I was 20, and I combined work with study. I decided to go to America in the summer under the Work and Travel program. I went to Alaska and stayed for three months.

About moving to the USA

Alaska is quite a memorable life period for me. We were working 16 hours a day, cleaning salmon. There were 5 to 6 hours left for sleep. I liked the physical work, but you cannot work at that pace for a long time: the brain begins to degrade due to constant lack of sleep and physical overstrain.

But there were advantages to it also: we ate a lot of red caviar there. We could eat a kilo of caviar for three of us in one evening.

I left Alaska for Sacramento: I knew some people who had moved there from Ukraine, and they allowed me to stay with them for a while. I was surfing the Internet, searching for something to do. At that time, I still did not really know how to program, but I had skills in the field of security. I decided to apply them in development: I began to study coding and created several interesting websites. 

Then, suddenly, a hackathon was to be held in Sacramento, not a trivial event for the area, although they were constantly happening in Silicon Valley at the time. It was organized by an IT company for recruiting purposes: they promised to hire the best contestants. And despite having just two months of programming experience at best, I won the first or second place there. I was offered a job, and they told me, “We will teach you everything you need. It is just your wish to do it that matters.” That was my first IT job in the USA.

I received a basic offer with a $20-an-hour wage. That is a very low rate for a programmer in the US, next to nothing. But back then, it was a pretty cool opportunity for me. My friends, the ones I was staying with, were quite surprised. They were working at Walmart for $10 to 12 an hour, and at first, they couldn’t even believe one could earn that much.

I worked for that company for 5 or 6 months and learned a lot. I realized that the future belongs to mobile technologies, and I wanted to build a career on those. 

About moving to the Valley

It was 2012. I decided I want to move on and relocate to San Francisco. I got into a car, crammed all my stuff into it, and drove off. And when I arrived, I understood I had nowhere to stay. 

I am such a spontaneous person: I can decide I want to move in one day, without taking trouble about where to sleep. However, I had sought out a job in SF in advance – I cannot do it any other way. I am not the kind that says, “I am sick of it all, I quit, and I’m going to look for another job!” No, I would rather have my back already covered.

I spent my first night in the car on one of the hills in a very thick fog. It turned out that in San Fransisco accommodation is very hard to find: upon arrival, I spent the whole day searching for a room through Craigslist. I wrote about a hundred letters and received an answer only in the morning. Some guys, who were working at Zinga, offered me a bed in their living room. So, I settled there.

This is what my first day in San Francisco was like.

About searching for myself and entering the crypto industry

I worked for Symphony, a company that was creating a secure messenger. At the same time, I was developing another product, and I worked on it for about a year and a half afterward. And then, I decided that I wanted to take a break from all this and just started traveling around America, trying to figure out what to do next.

That was one of the most interesting periods in my career. I realized that taking a rest is very important. I also understood that it should not last that long. When you have too much spare time, you begin to stuff your head with imaginary problems, and it also gets boring. All places seem similar: the first and second national parks that you visit are exciting, and the third and fourth are not different from others in any way.

On coming back, I joined a company that was developing an online banking system. That was where I arrived at crypto, although, in fact, I learned about it for the first time quite early, in about 2013. 

So, there was 2017. I decided this was the thing to go into. Trust Wallet was a hobby project for me; I just enjoyed working on it.

The first 50 users were my friends. I am such kind of a person that if I do something, I will tell everyone about it. And the first 50 App Store reviews were also all from my friends, whom I forced to write those for me. Just kidding, some wrote theirs themselves.

I think, when you make your own product, one thing is very important. How you position it. If you have gotten your first customers, first reviews, then when the 51st person comes and sees that your app has 5 stars, he or she will think, “Oh, cool! This is probably a good application because others have recommended it.”

That was the starting point. Further on, the traffic came in from search engines. You just have to know how to do some basic SEO stuff and apply that knowledge. I used some keywords; people would find Trust Wallet using popular search queries like “ethereum wallet download,” etc. And the fact that we had started from iOS (Google Play was added later) proved that our application was trustworthy. 

When we had about 15,000 or 25,000 users, I realized this was serious, not just a hobby anymore.

Trust Wallet today

As of today, I am still busy making the product; it must be 50% of the time that I dedicate to programming. I just love doing it, and I comfortably delegate management and some operational activities to my teammates. I have complete confidence in my team.

There are 12 of us, all in different timezones. We mainly interact through GitHub. Apart from myself, we have another person from Ukraine and several more guys from Russia, Czechia, Britain, Brazil, China, and Indonesia. We communicate via popular messengers, but chiefly all the work goes through GitHub because it is the technical part largely.

Over the last two months, we have come out on top among crypto wallets in terms of the number of downloads. We have jumped ahead of Blockchain.com, Black Wallet, Coinbase Wallet, Exodus, and the rest. For the last three years, there have been 8m to 10m downloads. I cannot tell you the exact number of active users – we do not disclose those figures – but there are at least several million of them.

My approach is not to compete with anyone. We are just making a product that would be convenient for people to use. Why should we compete? We do not make money off it; our only goal is to popularize cryptocurrency. Perhaps, we will launch monetization of some kind in the future, but now we compare our metrics with those of our competitors only to understand how good the product that we make for users is and what ideas we should borrow from our competitors in terms of functions, etc.

About jailbreaking, social engineering, and human greed

Every day, incidents occur when people have their money stolen or lose access to their wallets. There are so many scenarios of attacking users, and they are not related to the product. Many people keep their passphrases on the Internet – in their Google Disk or their mail, where it is very easy to steal them. And when they come to us and say, “You have stolen all my money!” we begin to figure out what has happened, and they discover their mistakes themselves.

Many people give their money to scammers posing as Trust Wallet tech support. Many simply lose their passwords, because the human brain is just unable to remember all the information it needs and to store it in proper order.

We think about how to improve all this from the product’s side. How do we give people more educational information, so that they don’t fall for such tricks? 

When I worked in security, I saw that hackers were stealing huge databases, containing emails and passwords, from organizations all the time. One of the most popular and effective attack methods is nothing else but social engineering. When people work there who know how to manipulate very well. And users who know little about technology are easily hooked. Because of the lack of knowledge. That is why I believe that educating people is crucial.

Today cryptocurrencies are primarily a means of speculation. Everyone hopes to earn 1,000% of the deposit, and this is one of the main reasons why people make mistakes and become victims of hackers – because of their greed. They may invest in some fraudulent products, pyramid schemes, etc. Greed is probably the biggest problem of our society.

About Ukraine

I liked Ukraine. I had a lot of friends there, I liked my school, my university.

A lot of people go to the US and then talk about how bad it was in Ukraine. But for me, it was a very good place both, in terms of career development and the people who were there.

Maybe someday I’ll come visit old friends but I don’t plan to live there.

The letter was received from Bittrex Global, a division of Bittrex for working with users from outside the United States.

According to the message of the company, the shutdown is due to “regulatory reasons.” It is not specified exactly what kind of reasons.

What now?

Accounts of users from Ukraine, Belarus, and five other countries will be disabled in 14 days. Fiat deposits and withdrawals are no longer available for Ukrainians. The remaining assets can be exchanged for available for withdrawal cryptocurrencies and withdrawn from Bittrex.

On November 6, 2019, representatives of the company and the Ministry of Digital Transformation of Ukrainian signed a memorandum of understanding. Thus, the company promised to help establish the legal status of virtual assets and cryptocurrencies in the country.

Under the agreement, the Ministry and Binance will set up a working group to develop a strategy for the implementation of blockchain technologies and the creation of new virtual assets/cryptocurrencies in Ukraine.

According to Minister Mykhailo Fedorov, the signing of the agreement means that the Ukrainian market is opened for the exchange:

“Thanks to this step, both Ukrainians and global cryptocurrency companies will be able to operate in Ukraine openly and transparently.”

Artem Afian, Managing Partner at Juscutum Attorneys Association, who participated in the preparation of this initiative, told AIN.UA that the company intends to open an office in Ukraine by the end of the year.

Binance plans to enter the Ukrainian market by the end of the year. We presented the company with a bill on cryptocurrencies, and it has seen that it will be comfortable to operate in the Ukrainian market following such norms. Over time, a part of the world’s transactions (blockchain hubs) may transfer to Ukraine,” he said.

At the end of this October, the inter-factional parliamentary association Blockchain4Ukraine presented two bills and one amendment on the legalization of cryptocurrencies and the implementation of blockchain in Ukraine’s state registries.

The overview includes data from 58 market companies and their opinions on a number of issues. According to Chobanyan, the number of these industry players is much larger. For various reasons, “at least almost plus the same number of companies” are not represented in the report.

Most of the surveyed companies were founded in 2016 and later:

• 2014 and earlier — 8%;
• 2015 — 12%;
• 2016 — 20%;
• 2017 — 32%;
• 2018 — 12%.

Among the industries, the companies’ representatives of which have adopted blockchain technology are the following: software development (38%), finance, investment and trading (38%), as well as for cryptocurrencies (32%) (some companies have several founders from different industries).

78% of respondents are focused on Ukrainian and global markets, 16% are focused only on foreign countries. However, a quarter of companies have attracted investments.

Forklog emphasizes that according to a survey, 56% of companies estimate the level of business security in Ukraine as “normal”, 30% as “bad”, 10% as “devastating” (1 out of 5) and 4% as “good”.

“Nevertheless, 76% of market players are confident that new Ukrainian companies are more likely to be launched in other jurisdictions, 14% believe that new companies will not disappear from the Ukrainian market, another 10% believe that new projects in Ukraine will no longer be launched, and existing ones will move abroad,” Forklog published.

The experiment with the use of such equipment within residential premises began in 2013. Back then, the company’s specialists suggested that the owners of private houses in the cottage in Kruglyk near Kyiv try to install such boilers for heating of the houses. In total, six home owners agreed to participate in the experiment. Two of them bought such boilers (with cost from $5,000 for one boiler), they profited from mining. The rest of the experiment participants installed boilers at home for heating and were compensated for the energy expended on equipment operation.

These boilers began operation in November 2013 and operated year-round until 2015. In that year, the equipment was turned off, due to the fact that the remuneration to homeowners was no longer enough to pay for energy. In the winter of 2017, there was a jump in the cost of Bitcoin, the equipment was switched on again for three months of the winter period, in the same houses. In 2018, the version of the WX6 boiler was updated and it was plugged in again in one of the houses (especially since the entire infrastructure for the connection was already ready in the house).

Such boilers are connected to boilers and floor heating systems. The miner uses boilers, inside of which there is a heat exchanger. “The miner-boiler heats the water inside the boiler through the heat exchanger, it is connected as an ordinary electric boiler. In such devices there are two outputs or pipes. The water enters one of the pipes, and comes out in the other one, but it’s already 5-7 degrees warmer. Then the water enters the floor heating system and returns with a lower temperature, then heats up again and again in a circle. Spent 1 kW of energy heats about 10-15 square meters rooms,” explains Slobodenyuk.

How does it look in numbers?

With the same equipment the entrepreneur heats his apartment and a garage in Kyiv, we are talking about a two-room apartment of 56 square meters. On average, the floor can be heated to 30 degrees Celsius, water – to 55-58 degrees.

Two miner-boilers with a total capacity of 3 kW/h are installed in the entrepreneur’s garage. For a month, the costs look like this: 2100 kW/h x 1.68 = 3444 UAH, for the same period the miners earn about 4500 UAH. The temperature in the garage is about 18 degrees Celsius.

How much heat will be needed to heat the house? One mining boiler replaces one battery. It conditionally consumes up to 1 kW/h. In a private house, on average 6 heating batteries will be enough for 100 square meters:

6 kW/hour x 24 hours = 144 kW. 144 kW x 30 (days per month) = 4320 kW. Further, if we take the electricity prices in 2018 for the private sector, it will be 1.64 UAH per kWh during the day (and half the price at night), which means, on average, about 1.4 UAH per kWh (about $0.05).

Conventional heating equipment works intermittently: when the house is heated, it is turned off, then switched on again. The mining boiler should work 24 hours a day. Equipment receives $0.08 per 1 kW/h from mining. A typical connection project for a private house with equipment specifications can be found here.

Bitcoin prices fluctuate, however, as long as the “plug” between the cost of electricity and the value of the extracted cryptocurrency remains, such equipment makes sense, says Slobodenyuk. “Now the difference is $0.03. Even if the cost of Bitcoin drops to $3,000, there will be no income, but the equipment will still compensate for the cost of electricity,” he says.