Argentina initiates regulation of cryptoassets

Due to the depreciation of its weak national FIAT currency (ie, the Argentine peso), Argentina quickly became one of the main crypto-adopter jurisdictions in the world. However, until March 2024, Argentina lacked a legal framework for crypto. The CNV had a lenient approach, not requiring registration or enforcing securities laws on crypto issuers, exchanges and crypto providers.

This changed with the March 15 passage of Law N°27,739, which introduced substantial reforms to Argentina’s regulatory framework to prevent money laundering and terrorist financing. A crucial aspect of the law was the creation of a category for VASPs, which are now mandated to monitor and report anti-money laundering (AML) activities. The law appointed the CNV as the regulatory authority for the crypto industry, with the task of establishing a comprehensive regulatory framework.

On March 22, the CNV issued General Resolution N°994, instituting a mandatory registry for VASPs. The resolution outlined several conditions for mandatory registration:

• Conducting operations using any “.ar” domain
  
  
• Having commercial agreements with third parties or affiliates that allow for the local receipt of funds or assets from Argentine residents
  
  
• Directing advertising or targeting Argentine residents
  
  
• Generating more than 20 percent of total turnover in Argentina from activities that require VASP registration
  
  
• The resolution defines VASPs broadly, including individuals or entities that:
  
  
  • Exchange between virtual assets for FIAT currencies or other virtual assets
    
    
  • Transfer virtual assets
    
    
  • Provide custody or administration of virtual assets 
    
    
  • Offer financial services related to the offering or sale of virtual assets 

Registration is completed online and requires only basic legal and commercial information to identify the individual or entity, with no technical information needed. However, the resolution prohibits registration for individuals or entities based in jurisdictions deemed non-cooperative for tax transparency or considered high risk by the Financial Task Force (FATF).

Additionally, the resolution clarifies that registration in the VASP registry does not imply a license or CNV supervision of activities, which will be addressed by future regulations. Law N°27,739 established the foundation for the new framework, emphasizing user protection, information security, personal data protection, operational safety and efficiency, stability, solvency, transparency, good corporate governance, AML practices, and the protection of public savings.

A new, comprehensive legal framework for VASPs and crypto is expected in the coming months. For more information, please contact the author.