Ukraine’s Crypto Exodus: Weld Money’s Exit & Regulatory Uncertainty
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Ukraine's burgeoning crypto market is facing a significant setback as several crypto firms, including Weld Money, are exiting the country. Weld Money, a fintech company that allowed users to spend crypto via Mastercard-linked cards, announced its closure in Ukraine, citing military controls under martial law and unclear regulatory rules as the primary reasons. Users have until the end of June to withdraw their funds. The company's difficulties highlight broader challenges facing the Ukrainian crypto sector. Service disruptions due to military checkpoints and tightened transaction checks hampered Weld Money's operations, leading to user complaints as early as March. This situation underscores the impact of regulatory uncertainty on fintech growth in Ukraine. The government's proposed 18% tax on crypto income and a 5% defense surcharge, coupled with delays in passing the key “On Virtual Assets” bill, create an unstable environment for businesses. Weld Money is not alone in its departure; Kuna, a local exchange, ceased trading in January, and Trustee Plus, a wallet provider, halted new sign-ups in May, both citing legal ambiguities. The challenges extend beyond regulations; rising costs linked to the ongoing war and restrictions on cash flows exacerbate the difficulties faced by smaller startups. Maintaining tech teams and ensuring compliance becomes increasingly challenging under these circumstances. While the passage of the “On Virtual Assets” bill could potentially improve the situation by providing clearer rules on taxation and military levies, analysts suggest that even then, smaller, home-grown firms might struggle to compete with larger, internationally established companies with extensive compliance resources. The exodus of crypto firms from Ukraine highlights the significant impact of regulatory uncertainty and the ongoing war on the country's ambitions to become a blockchain hub. The situation leaves customers scrambling to move their funds and raises concerns about the future of the Ukrainian crypto industry.
(Source: https://www.newsbtc.com/news/crypto-firms-flee-ukraine-weld-money-becomes-latest-to-exit/)
