The regulatory authority for securities in Argentina has completed its regulations for virtual asset service providers (VASPs), which detail essential conduct guidelines and custody protocols for cryptocurrency exchanges and platforms handling digital asset transactions.
The new rules were issued on March 13 as part of General Resolution No. 1058 by the National Securities Commission.
As per a translated announcement, the regulations establish requirements regarding registration, cybersecurity, asset custody, anti-money laundering measures, and risk disclosures for VASPs functioning within the country.
The primary aim of these regulations is to ensure “transparency, stability, and user protection within the crypto ecosystem,” as highlighted in the announcement.
Tax attorney Diego Fraga noted that the finalized guidelines mandate the separation of company and client funds, annual audits, and monthly reporting to the regulatory body.
Image Credit: Diego Fraga
Since 2024, VASPs in Argentina have been required to register with the national registry for virtual asset service providers. The new provisions also stipulate that registrations may be revoked for noncompliance, and any unregistered entity may face legal action to cease operations.
Those currently registered have until July 1 to adhere to the new provisions, while companies registered in Argentina have until August 1, and those based overseas have until September 1 to comply.
“Entities that fail to meet the specified requirements and timelines will be prohibited from operating in Argentina,” stated the president of the regulatory body.
Related: Argentina’s aspirations for crypto adoption dim following Milei’s LIBRA memecoin issue
Crypto Adoption Continues To Rise Despite LIBRA Controversy
This regulatory shift occurred against a backdrop of increasing cryptocurrency adoption in the nation, spurred in part by the steep decline of the Argentine peso.
By mid-2024, there was a notable increase in cryptocurrency adoption, with many citizens turning to stablecoins like Tether’s USDt (USDT).
An October report from Chainalysis found that Argentina surpassed Brazil, becoming the largest country in Latin America for cryptocurrency inflows, with approximately $91 billion flowing in between July 2023 and June 2024.
Argentina leads Latin America in cryptocurrency adoption by value received from July 2023 to June 2024. Source: Chainalysis
Positive trends in crypto adoption persist despite the LIBRA controversy tied to President Javier Milei. Reports indicated that Milei had publicly supported the memecoin prior to its sudden drop in value, raising concerns about potential misconduct.
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