Argentina Sets New Regulations for Virtual Asset Providers.

Argentina’s securities regulator, the Comisión Nacional de Valores (CNV), has officially finalized comprehensive rules for virtual asset service providers (VASPs). These regulations aim to establish a robust framework for the operation of cryptocurrency exchanges and platforms that facilitate digital asset transactions. The new guidelines cover essential aspects such as codes of conduct, custody requirements, and cybersecurity measures, which are crucial for ensuring the integrity and security of the virtual asset ecosystem.

Key Regulations for Virtual Asset Service Providers

According to a translated version of the regulations, VASPs operating in Argentina will now face a series of obligations designed to enhance transparency and protect consumers. These obligations include:

• Registration: All VASPs must register with the CNV to operate legally within the country.
• Cybersecurity: Providers are required to implement robust cybersecurity measures to protect user data and assets.
• Asset Custody: The regulations mandate the separation of company and client funds to prevent misuse.
• Money Laundering Prevention: VASPs must adhere to strict anti-money laundering (AML) protocols.
• Risk Disclosure: Companies are obligated to disclose potential risks associated with digital asset transactions.

Mandatory Compliance Deadlines.

Diego Fraga, an Argentine tax lawyer, emphasized that the final guidelines include mandatory annual audits and monthly reporting requirements to the CNV. VASPs operating in Argentina must comply with these regulations by specific deadlines:

• Individuals registered with the PSAV have until July 1 to conform to the new rules.
• Companies incorporated in Argentina must comply by August 1.
• Foreign companies have until September 1 to meet the requirements.

Roberto E. Silva, the president of the CNV, stated, “Those who do not comply with the established requirements and deadlines will not be able to operate in Argentina.” This strict enforcement underscores the government’s commitment to regulating the rapidly evolving cryptocurrency landscape.

Background on Argentina’s Crypto Regulations.

The push for clearer regulations in Argentina has intensified over the past year, particularly after the CNV implemented registration requirements for crypto issuers, subjecting them to existing securities laws. This regulatory pivot reflects a growing wave of crypto adoption in the country, driven in part by the rapid depreciation of the Argentine peso. An October report by Chainalysis highlighted Argentina as the largest Latin American country for crypto inflows, with approximately $91 billion flowing into the market between July 2023 and June 2024.

Future of Crypto in Argentina.

Despite the regulatory changes, crypto adoption trends in Argentina remain positive. The evolving political landscape, particularly under President Javier Milei, has also influenced the crypto market. Milei has publicly endorsed various cryptocurrencies, including a notable memecoin, which recently experienced a significant drop in value, raising concerns about potential market manipulation.

As Argentina continues to navigate the complexities of cryptocurrency regulation, the CNV’s new rules are expected to provide a clearer framework for VASPs, fostering a safer environment for users and investors alike. The emphasis on compliance and security will likely encourage further growth in the sector, as more individuals and businesses seek to engage with digital assets.

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