Argentina begins establishing a comprehensive framework for crypto assets

The Comisión Nacional de Valores (CNV), Argentina’s legislative body, has issued General Resolution N°1025 (General Resolution), inviting public consultation on a draft for new regulations governing virtual asset service providers (VASPs).

The main features of the October 2024 General Resolution include the mandatory establishment of VASP entities in Argentina, minimum net worth requirements based on the type of services provided, the appointment of specific company officers, the implementation of technical infrastructure, mandatory audits, and the development of certain internal policies and manuals.

Although the General Resolution is still in draft form, it is expected that the final version will closely align with the current proposal.

Background

Shortly after the enactment of Law N°27,739 on March 15, 2024, which designated the CNV as the regulatory authority for the crypto industry, the CNV issued General Resolution N°994. This resolution established a mandatory registry for VASPs. Concurrently, Argentina’s Financial Intelligence Unit (UIF), which acts as the anti-money laundering (AML) authority, issued Resolution 49/2024, requiring registered VASPs to also register with the UIF as AML-regulated entities.

This latest consultation process on the General Resolution allows the CNV to gather feedback before finalizing the resolution, which is expected to impose significant obligations on registered VASPs. The new resolution detailing the final terms of the regulation is anticipated around January 2025.

Proposed regulations under the General Resolution

Under the proposed regulatory framework of the General Resolution, companies can establish a presence in Argentina by incorporating as a local corporation (SA), a partnership (SRL), or a simplified share company (SAS). Alternatively, VASP activities can be conducted by a foreign corporation registered as a branch with the local corporate registry.

Importantly, VASPs are now required to verify a minimum net worth through certification by an independent public accountant. The required net worth ranges from approximately USD 85,000 to USD 170,000, depending on the specific category assigned to the VASP. There are five categories, each defined by activities such as exchanging virtual assets for fiat, transferring, custody, or providing financial services. Additionally, if a VASP’s trading volume falls below a certain threshold, the minimum net worth requirement will be reduced by 50 percent.

Another important aspect of the new regulatory framework is the requirement for VASPs to submit quarterly reports detailing clients, accounts, trading volume, virtual assets, and the countries in which they operate. Additionally, they must provide semi-annual accountant certifications confirming compliance with minimum net worth requirements and annual reports on external audits and compliance.

Furthermore, the regulation mandates the appointment of a compliance officer and a public relations manager, as well as the accreditation of specific infrastructure, including computer systems, cybersecurity measures, and custody requirements. VASPs are also required to develop procedure manuals, a code of conduct, information security policies, and claims management procedures.

While the General Resolution is still in draft form, it is expected that the final resolution will closely align with the current proposal.