The Incrypted Conference 2025, held in Kyiv, couldn’t ignore one of the hottest topics for Ukraine’s Web3 community — crypto regulation. On stage, key figures directly involved in shaping the country’s legislative framework for the digital asset market came together for an open and timely discussion.
Among the speakers was Yaroslav Zheleznyak, Deputy Head of the Parliamentary Committee on Finance, Tax, and Customs Policy, and a Member of Parliament who has been one of the most consistent advocates for cryptocurrency legislation in the Verkhovna Rada
In an exclusive interview with Incrypted, Zheleznyak spoke about the fate of Ukraine’s long-suffering draft law on virtual assets and crypto taxation, the potential creation of a national crypto reserve by the National Bank, and even shared his personal experience as a crypto investor.
Naturally, we should probably start with the draft law “On Virtual Assets.” But as far as I understand, nothing has really moved forward since it got stuck in the process. Is that correct?
To recap: the Parliamentary Committee on Finance, Tax, and Customs Policy unanimously supported the draft law on virtual assets. After that, it was submitted to Parliament for consideration. However, the process stalled — and the bill hasn’t moved any further.
According to Zheleznyak, the draft was pulled from the agenda at the request of the Office of the President. At the same time, he claims the initiative to block the bill came from the National Securities and Stock Market Commission (NSSMC), specifically its chairman, Ruslan Magomedov — who, for his part, denies this.
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Ruslan [Magomedov] said he wasn’t the one behind the blockage of the bill. And of course, we can’t not believe the regulator,” Zheleznyak said with a hint of irony. “Well, if it’s not him, then it must be some other force. Which means we need to keep pushing this forward — and eventually we’ll find out who this mysterious Voldemort is, the one lurking around the President’s Office asking them not to put the bill up for a vote.
We go through this same dance with the government — especially the President’s Office — every time there’s a similar initiative,” Zheleznyak explained. “There’s a proposal, someone in the Office is against it, so they stall it. Then we find bills that they need, tighten the screws a bit on things like Easter egg painting projects, and suddenly they show up asking, ‘What’s going on? We were working constructively with Parliament, weren’t we?’ And we say, ‘Well, we’re not seeing any of that constructive spirit when it comes to the crypto bill.’ Eventually, they put it back on the agenda, we vote on it — and the whole cycle starts again
The current version of the bill doesn’t clearly define who the primary regulator of the crypto market will be. However, it’s already clear that the National Bank will be responsible for overseeing tokens backed by fiat currencies.
It’s not that the National Bank is particularly eager to regulate crypto. In fact, it’s one of those cases where they need a bit of convincing. […] But this stance comes more from the IMF than from our politicians, as the IMF has serious concerns about how the National Securities and Stock Market Commission operates — not specifically regarding crypto, but in other areas.
I have a feeling — and journalists have pointed this out — that the Commission is likely to undergo some personnel changes soon. [According to Economic Truth, the head of the NSSMC, Ruslan Magomedov, may lose his position.]
Perhaps these personnel changes will give the Commission a fresh impetus and a renewed mandate of trust, including from the IMF, enabling it to remain the regulator. Objectively, the NSSMC is better suited as a regulator than the National Bank. And no one wants to overload the National Bank with additional responsibilities.
The National Bank is generally known for its rather skeptical stance on cryptocurrencies. If it becomes the main regulator of the market, there’s a risk that the approach won’t be very crypto-friendly.
It’s not that the National Bank is known for being particularly liberal — and that’s pretty normal for a central bank.
Why is the market wary of the National Bank? Because, historically, oligarchs have been closely tied to banks in our country, and they ended up stealing money from those banks — some more, some less. But the outcomes were generally the same.
To prevent this, the IMF pushed through legislation that made the National Bank truly independent — even the courts have limited power over it. It’s a very powerful regulator.
Honestly, I don’t know many examples where a central bank regulates the crypto market directly. Usually, in other countries, there’s a mega-regulator that combines the securities commission, central bank, and financial commission under one roof. We don’t have that yet.
A few years ago, one of the drafts of the law considered the possibility of creating a dedicated agency to regulate the cryptocurrency market. Is that proposal still on the table today?
Actually, it’s not a bad idea at all. From a marketing perspective, it could look pretty good for the country. A good — and at the same time bad — example is the Commission for Gambling Regulation.
We legalized gambling and, accordingly, created a separate government body to oversee it. However, that ended with the commission being dissolved and its powers transferred to the Ministry of Digital Transformation. In my opinion, this was more of a political issue than a regulatory one.
The main drawback of creating a new agency is that it takes a long time — from finding office space to hiring staff.
Secondly, sooner or later, it would need to be granted the same kind of mandate as the Commission or the National Bank. So the question arises: why create more regulatory bodies? Plus, there would likely be conflicts of interest.
In short, it seems a bit complicated. The proposal was made, but the president vetoed it and suggested assigning regulation to the Securities and Stock Market Commission. Not that, putting aside politics, this was a bad idea.
We’ve already touched on the National Bank and its skepticism toward cryptocurrencies. Let’s move on to your initiative to allow the National Bank to create reserves in crypto assets. Have you discussed this proposal directly with the National Bank?
Of course. Well, let’s just say I didn’t see much enthusiasm in their eyes — but they didn’t faint either.
The National Bank is a very conservative institution. I get the feeling they’re not exactly thrilled, but there are examples around the world. We had an interesting discussion with the IMF on this topic. They aren’t excited either, but honestly, it’s hard for them to comment after Trump’s actions and statements.
We prepared a very simple version of the draft law. It was my proposal not to complicate things.
We already have reserves, and they don’t have to be only in fiat currency. We wanted to give the National Bank the option — maybe they’d want to hold something in USDT. At first, we planned to set some percentage limits, but later decided not to include that.
What are the risks if the law passes? The National Bank might not decide to create reserves in crypto assets? Fine — but what if they want to? They’ll have the option.
The document doesn’t specify any particular asset for forming the reserve — like Bitcoin or USDT. What do you think it could be?
Well, if you had asked me a year ago, I would have said, “Let them invest in XRP.” That would have improved Ukraine’s situation.
Look, let’s suppose tomorrow the United States issues a digital dollar, or the EU issues a digital euro backed by their own reserves.
Are those virtual assets? Yes. And could we add them to the reserves? Absolutely. What’s the difference — whether it’s a central bank digital currency (CBDC) or the dollar?
If the National Bank starts investing in NFTs with apes, that would definitely be a bit strange. But even now, they can take risks with other currencies. We’re not worried they’d invest in the currency of a poorly developed country, so we probably shouldn’t worry here either. It’s their mandate and their responsibility.
Regarding how crypto reserves might be formed — do you have any idea how much cryptocurrency Ukraine currently holds that could be used to form such reserves without purchasing additional assets?
As a state, we don’t actually have cryptocurrency holdings. What we do have are seized assets. The process works like this: the Asset Recovery and Management Agency (ARMA) puts them up for auction and sells them, or they remain simply frozen. Another possibility involves very specific cases linked to intelligence agencies.
From what I see, the formation of any reserves — in any assets, including virtual ones — follows this logic: we have incoming funds, we already have some reserves, and we diversify them. The National Bank manages this process. We’re simply giving them one more tool. In this regard, I have complete trust in the National Bank.
I don’t expect the National Bank to adopt El Salvador’s approach. There’s no need to convert everything into Bitcoin. President Bukele got lucky with the timing, but it could have easily gone the other way.
Let’s talk about your personal experience with cryptocurrencies. We can see from your declarations, and you often mention yourself, that you hold crypto assets. When did you first get acquainted with digital assets?
The first time the crypto bill was introduced was in 2022, if I’m not mistaken.
I decided to dive in and did some googling. I found two exchanges that were considered the most trustworthy — thank God, not FTX. Those were Binance and Coinbase. I downloaded the apps, checked them out, completed KYC, and made a purchase. […]
What was your first purchase? Bitcoin?
I don’t quite remember — I think it was Ethereum. I bought about $100 worth. I wanted to understand how a transaction from my bank worked. Then I started reading about protocols, put some into Solana, and forgot about it. Then FTX collapsed. I thought, well, whatever, I lost that $100. But then Solana’s price skyrocketed. Oh, that was cool!
So you’re the lucky one who bought Solana at $20?
Well, not quite at $20.
Nowadays, I sometimes buy small amounts — like $100 or less. I just like the idea behind the technology, so it’s usually XRP, Cardano, and a bit of Solana. I want to be clear upfront — this is absolutely not investment advice.
How do you generally feel about cryptocurrencies?
In this case, I see them as a kind of casino with elements of betting. That said, I really like some of the technological approaches behind them.
For example, with XRP, I thought: Ripple has something interesting going on. And most likely, the U.S. SEC won’t crush them because Gary Gensler—the former head of the SEC — is stepping down. It was clear the SEC’s case against Ripple would fizzle out, and XRP would rise. And that’s exactly what happened.
So, you’re not a Bitcoin maximalist. You don’t believe it’s digital gold or the money of the future?
No.
I’ve watched all of Gary Gensler’s lectures on blockchain history, read a lot of books, and I’m still learning about it. I’m interested in blockchain as a technology — it has many applications. But I don’t believe we’ll move all registries onto blockchain because it’s not efficient in terms of resources.
That said, technologies developed by companies like Ripple can be pretty cool—they work fast, and we’ll likely move gradually in that direction. Overall, the market is evolving and remains quite vibrant.