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Cryptocurrency industry members in Argentina expressed their opinions regarding a new draft that proposes restrictions on the operation of crypto institutions in the country. If the draft is approved, each institution will register with a minimum capital amount to operate on Argentine soil.
Argentina Submits Draft for VASP Rules to Public Consultation
Argentina is innovating its cryptocurrency framework to better protect crypto users. The Argentine securities regulator (CNV) recently announced a public consultation of a draft to regulate the operations of virtual asset service providers (VASPs) in the country, imposing new compliance requirements for these institutions.
General Resolution 1,025, if approved as is, will force crypto companies to disclose agreements with third parties and customers. It also seeks to prevent money laundering and terrorism financing by establishing policies and cybersecurity norms. The framework is a follow-up to the VASP registry launched earlier this year.
Regarding the objectives of this new draft, CNV President Roberto Silva stated that the resolution sought to “regulate according to the principles of the Law, but without stopping innovation in the sector.” He also called on crypto exchanges to participate actively in perfecting this draft.
One of the most controversial parts of this draft is its new classification of crypto companies, establishing a minimum of registered capital for these to operate in the country. The minimum capital amount for institutions providing transfer, custody, and management of virtual assets will be nearly $173,000. Individuals will participate in fiat-to-crypto and crypto-to-crypto exchanges without constituting a company.
Members of the crypto industry were cautious about this new draft, stating that while regulations are necessary, these should be built to allow c companies to grow.
Carlos Peralta, Bitso Argetina’s lead of Public Affairs, stated:
At Bitso, we deeply value that the review of the requirements for registration in the VASP registry is done through public consultation, which will contribute to financial inclusion and the construction of a faster and more efficient financial infrastructure.
Juan Pablo Fridenberg, director at Lemon, one of the most popular exchanges in Argentina, is also in favor of regulation that incentivizes exchanges to operate in the country. “Authorities know that regulation must be intelligent and gradual. As international organizations have warned, a framework that distorts, suffocates, or makes the activity of VASPs too expensive will encourage users to move to other, deregulated, or cross-border areas,” he concluded.
Writer’s take: Regulation is always good for crypto companies, as they can ascertain if they are legally acting by following enacted laws. The absence of a clear rulebook causes institutions to be uncertain about their duties and rights, leading to regulation by enforcement, an uncomfortable path for both state institutions and companies.