Argentina Says “Sí” to Crypto – But With Strings Attached

Key Takeaways

• Argentina strengthens anti-money laundering measures for crypto.
• Financial Action Task Force scrutiny prompts legislative action.
• There are particular concerns over market consolidation.

The Argentine Senate recently approved legislation establishing a registry for entities providing cryptocurrency services within the nation.

Argentina’s securities regulatory authority, the CNV, manages the registry. It orders cryptocurrency businesses to disclose customer personal information and other relevant data to governmental bodies.

Argentina Tightens Grip on Crypto with New AML Rules for VASPs

In a move to enhance anti-money laundering measures, Argentine legislators have introduced new regulations for virtual asset service providers (VASPs) within the country. On March 14, the Argentine Senate unanimously passed a law revising existing regulations for cryptocurrency exchanges and similar entities, requiring them to adhere to stricter controls.

The translated post by X says :

“With 69 affirmative votes, the modification of the Penal Code regarding the prevention and repression of money laundering, the financing of terrorism and the financing of the proliferation of weapons of mass destruction is approved unanimously.”

Additionally, the law imposes various responsibilities on these companies, such as the requirement to provide personal customer data and other information, aimed at improving the transparency, traceability, and oversight of transactions and users.

Rushing AML Crypto Law Amid FATF Scrutiny

The implementation of this legislation is in direct response to the Financial Action Task Force (FATF) , the international body focused on combating money laundering, which had previously recommended such measures to Argentina. The FATF was set to evaluate Argentina’s compliance efforts, prompting this legislative action.

Some experts thought a presidential executive order would make the law, due to its significance. The lower chamber of Congress passed the bill, but it was postponed in April. However, it passed through the Senate. The cryptocurrency community in Argentina has expressed concerns over this law, fearing it might lead to market consolidation.

Critics argue that while large VASPs have the means to meet the new requirements immediately, smaller exchanges and peer-to-peer (P2P) platforms might find the operational costs prohibitive. As a result, this could limit their ability to operate.

Argentina Proposed Crypto Tax Relief Before AML Law Passage

Prior to the approval of this anti-money laundering legislation, the Argentine Fintech Chamber proposed a bill aimed at securing tax exemptions for cryptocurrency holders. The law wanted to align the tax responsibilities of crypto assets with those of traditional financial assets.

Argentina’s libertarian president, Javier Milei, recently retracted the notion of initiating his dollarization plan in 2024. He clarified that, although achieving dollarization and free convertibility of currency are paramount for his administration, it is not practical to  stabilize the country’s economy and implement the strategy this year.