With the global rise of cryptocurrencies, many countries have introduced regulatory frameworks to ensure transparency and security in this new financial market. Argentina, a nation known for its high inflation and economic volatility, has seen rapid growth in crypto adoption, becoming a leading crypto market in Latin America. In response, the Argentine government enacted Law No. 27,739, which reforms anti-money laundering (AML) and counter-terrorist financing (CTF) regulations and intoduces a licensing framework specifically for Virtual Asset Service Providers (VASPs).
Defining VASPs and Licensing Requirements in Argentina
A VASP includes any entity or individual offering services such as exchanging virtual assets for fiat currencies or other virtual assets, transferring virtual assets, providing storage or management, or facilitating financial services related to virtual assets.
Operating legally as a VASP in Argentina requires a license from the Comisión Nacional de Valores (CNV), Argentina’s securities regulator. The application process includes the following:
- Pre-Application Submission: Entities must file initial documents, including incorporation details, with the CNV.
- Financial Documentation: Applicants must present financial statements, business plans, and evidence of financial stability.
- AML and KYC Compliance: VASPs must demonstrate compliance with Know Your Customer (KYC) and AML standards.
- CNV Review: Once submitted, the CNV assesses each application to ensure regulatory and compliance standards are met.
The licensing process can take anywhere from three weeks to several months, depending on the completeness of the application. Through a VASP license, Argentina ensures these entities adhere to AML/CTF regulations.
Public VASP Registry and Consumer Verification
Once licensed, VASPs are listed in a public registry maintained by the CNV. This registry allows the public to verify licensed VASPs, promoting transparency and enhancing consumer confidence in crypto services available in Argentina.
Key Regulatory Resolutions Shaping VASP Operations
The regulatory framework for VASPs in Argentina is reinforced by two key resolutions under Law No. 27,739:
- CNV General Resolution No. 994/2024: This mandates that all VASPs register with the CNV, including both residents and non-residents if they engage in activities involving Argentina.
- Resolution No. 49/2024 by the Financial Intelligence Unit (UIF): This resolution designates VASPs as reporting entities to the UIF, adding obligations such as KYC procedures, transaction monitoring, and reporting requirements. VASPs must also implement risk management frameworks to prevent financial crimes.
These resolutions became effective on March 26, 2024, with a 45-day compliance period for VASPs already operating in Argentina. Together, they set the foundation for a regulated crypto environment, making compliance a priority for VASPs in the country.
Monthly Reporting Obligations for VASPs
To support transparency and accountability, VASPs in Argentina are subject to strict reporting obligations. Each month, VASPs must report all client account openings and closures. They must also report any transactions involving virtual assets equal to or exceeding six times the minimum wage or any transaction over $1,350. Additionally, VASPs are required to submit detailed personal information of account holders, ensuring transparency and traceability in crypto transactions.
Conditions for Registration in the VASP Registry
To conduct business, VASPs, local as well as foreign, must register with the CNV’s VASP Registry if they meet specific conditions, including:
- Using an “.ar” domain for operations;
- Engaging in commercial agreements that facilitate the receipt of funds from Argentine residents;
- Targeting Argentine residents through advertising;
- Generating over 20% of turnover from Argentina.
Registration requires basic legal and commercial information. However, entities based in non-cooperative jurisdictions, or those considered high-risk by the Financial Action Task Force (FATF), are prohibited from registering. Importantly, registration does not equate to CNV supervision of activities, but it does establish a framework for potential oversight.
While registration does not imply licensing or ongoing CNV supervision (for foreign VASPs), it lays the groundwork for future regulatory oversight. Law No. 27,739 prioritizes consumer protection and requires VASPs to adhere to high standards of operational security, data protection, and good corporate governance. The framework emphasizes:
- Protection of user information and personal data;
- Operational efficiency and stability;
- Transparency and solvency in financial operations;
- AML practices to curb financial crimes;
- Safeguarding public savings.
The “Blanqueo” Initiative
Coinciding with these regulatory efforts, Argentina launched an asset regularization program known as “blanqueo.” This program allows individuals and businesses to declare previously undeclared assets, including cryptocurrencies, by paying a tax. The first phase of the program concluded on October 31, 2024, but participants can still join until April 30, 2025, with the final deadline for submitting a sworn declaration on May 30, 2025.
The “blanqueo” program is aligned with the reporting obligations imposed on VASPs. By declaring assets and adhering to VASP reporting standards, the government aims to create a secure and transparent process for handling digital assets while minimizing money laundering risks.
Conclusion
Argentina’s regulatory framework for VASPs under Law No. 27,739, combined with the ongoing “blanqueo” program, represents a significant step in strengthening the country’s crypto industry. For crypto businesses aiming to operate in Argentina, understanding and adhering to these licensing and reporting requirements is essential. This approach fosters a secure, transparent environment for crypto activities and ensures a level of consumer protection crucial in today’s dynamic financial landscape.
At Cardinals, we specialise in digital assets and cryptocurrencies. If you are planning to expand your crypto business into new markets, we can provide expert guidance and support to help you navigate the regulatory requirements and successfully enter this promising market.
