Government Intervention in Crypto Regulation
The government of Argentina is taking steps to regulate cryptocurrency service providers by issuing an executive order. This move aims to prevent Argentina from landing on the Financial Action Task Force (FATF) gray list and would subject crypto service providers to oversight by the local securities watchdog.
President Javier Milei is reportedly preparing to issue an emergency decree to establish a regulatory framework for cryptocurrency service providers. This framework would bring these entities under the supervision of the national securities watchdog (CNV).
Motivation Behind Regulation
The government’s focus on regulation is driven by the desire to keep Argentina off the FATF gray list. Argentina had previously been listed from 2010 to 2014 due to its lenient money laundering policies. The impending visit from the FATF to evaluate the country’s anti-money laundering efforts has spurred this regulatory initiative.
Under the proposed decree, all cryptocurrency service providers, regardless of their location, would be required to register with the national cryptocurrency watchdog. They would also need to obtain a license from this organization to operate legally. Additionally, these providers would be mandated to share information with the national intelligence unit to ensure compliance with anti-money laundering laws. This includes producing risk reports and reporting suspicious transactions.
Potential Impact on Crypto Environment
The implementation of these regulations could lead to consolidation in the cryptocurrency sector. Larger providers may find it easier to comply with the new requirements, while smaller exchanges and peer-to-peer markets may struggle to meet the regulatory standards and could be forced to cease operations.
Timeline for Implementation
The executive order is expected to be issued before March 6, coinciding with the FATF’s visit to evaluate Argentina’s anti-money laundering measures. This demonstrates the urgency with which the government is moving to address regulatory concerns in the cryptocurrency space.
