UKRAINE Trends and Developments Contributed by: lllya Tkachuk, Igor Krasovskiy and Inna Kostrytska, INTEGRITES
gies. The law establishes the legal framework for transactions in cryptocurrency and, more gener- ally, regulates all types of virtual assets. Recently, fintech platforms and services have penetrated the Ukrainian economy and market even deeper after the central bank has tightened capital and exchange controls in response to Russia’s invasion of Ukraine. Naturally, individuals and companies, being under pressure of local currency devaluation, on one hand, and limited in their ability to trans - act with the use of traditional payment instru- ments, on the other hand, have turned to real- time digital payments, digital banking platforms, e-money, crypto-assets and crypto-cards. Not to mention that individual entrepreneurs who left Ukraine prefer to be paid by crypto rather than fiat money due to the Ukrainian FX control. As a result, the authors observe an unprece- dented interest in global crypto exchanges and payment systems in the Ukrainian fintech eco- system. The ambit of financial services offered by local players to Ukrainian customers is rang- ing from digital payments, P2P & C2P lending, crypto exchange and crypto payment cards to investments in foreign securities via crypto plat- forms. At present, foreign investors have a unique opportunity to invest in the fast-growing and expanding Ukrainian fintech market which will most likely bring very lucrative returns in the
istrated by the Ukrainian Startup Fund and will be used to support the most vulnerable sector – start-ups. The Fund has already invested more than USD6 million in more than 250 start-ups in Ukraine and Eastern Europe. In addition, the European Commission launched a EUR20 million support programme for the IT community in Ukraine. This initiative will be implemented by amending the European Inno- vation Council work programme. It will allow the support of at least 200 Ukrainian start-ups with up to EUR60,000 grants. The programme will also include advisory services aimed at integra- tion into the European innovation ecosystem, opening new markets and attracting new financ- ing. In addition, a number of private companies and associations offered their support to Ukrainian IT start-ups. More specifically, Google created a special fund accumulating USD5 million of finan- cial support and mentorship; the 7Wings fund issues grants of USD50,000 to finance Ukrainian start-ups which maintain their teams in Ukraine; and UA Founders marketplace was launched to connect Ukrainian start-ups with foreign donors. After the initial USD5 million fund, a new fund of USD10 million was announced by Google for 2024 and 2025. As in the case with the first fund, selected Ukrainian start-ups will receive up to USD100,000 in non-dilutive funding, as well as ongoing Google mentorship, product support, and up to USD350,000 in Cloud credits. IT deals at war Although the war caused a dramatic impact on the technology M&A market, in 2023 and 2024 the authors have seen and are seeing the signs of recovery of deals.
future, based on current projections. Special support for the IT sector
Despite the war, the government of Ukraine allocated up to UAH2.8 billion (approximately USD67 million) for the support and develop- ment of the IT sector. The funds will be admin-
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