Argentine Crypto Firms Face Mandate to Register or Halt Operations

In a bid to enhance compliance with anti-money laundering and terrorist financing laws, Argentina has mandated all local crypto firms to register with the newly established Registry of Virtual Asset Service Providers. Those who fail to comply will be prohibited from operating within the country. The move comes as a surprise to many in the crypto industry, given the libertarian leanings of Argentina's President, Javier Miliei.

Argentina Mandates Crypto Firms to Register or Cease Operations

The Argentine government has issued a stern directive to all domestic cryptocurrency firms, mandating them to register with the newly established regulatory body for the sector. Failure to comply will result in immediate cessation of operations.

New Registry for Virtual Asset Service Providers

On March 14, Argentina's senate approved legislation establishing the Registry of Virtual Asset Service Providers. This move aligns with the recommendations of the Financial Action Task Force (FATF), an international body dedicated to combating money laundering and terrorist financing.

The National Securities Commission (CNV), the designated regulatory authority, announced the registry's creation on March 26. The CNV emphasized that the regulations are essential for "identifying the individuals and legal entities that provide services related to cryptoassets in the country."

Services subject to registration include:

• Buying and selling cryptocurrency
• Trading cryptocurrency
• Lending cryptocurrency
• Sending or receiving cryptocurrency

"Those who are not registered will not be able to operate in the country," declared CNV President Roberto E. Silva.

Compliance with Anti-Money Laundering Laws

The primary objective of this regulatory framework is to enhance compliance with anti-money laundering (AML) and terrorist financing laws. This goal is a priority for crypto watchdogs worldwide, particularly in the United States.

However, the swift move towards regulation has surprised many in the crypto industry, considering Argentina's recent election of Javier Miliei, a self-proclaimed libertarian and advocate for small government.

Industry Reaction: Confusion and Disappointment

Bull Bitcoin CEO Francis Pouliot expressed bewilderment on Sunday, tweeting: "Javier Milei is going the exact opposite route expected of a 'pro-bitcoin' libertarian."

The crypto industry had initially welcomed Milei as an ally, due to his shared opposition to central banking. While Milei has not explicitly endorsed Bitcoin-specific policies, he has acknowledged its significance as "the return of money to its original creator: the private sector."

Bitcoin as a Currency vs. a Security

While strict AML regulations for cryptocurrencies are becoming increasingly common, some industry leaders question the necessity of a registry for Bitcoin exchanges.

Manuel Ferrari, co-founder of the Money On Chain protocol, believes it is "a terrible idea." In an interview with Forbes, he argued: "Bitcoin is money, not a security. It's as wrong as if currency exchange houses for dollars or euros or shops where gold is bought and sold had to register with the CNV. It's complete nonsense."

Legal Tender in Argentina

Argentina's embrace of Bitcoin as a viable currency is noteworthy. In December, the nation's foreign affairs minister confirmed that the country had scrapped its legal tender laws, allowing contracts and payments to be settled in any currency, including Bitcoin.

This move has resonated with Argentine citizens, who have increasingly turned to Bitcoin in the face of rampant inflation. The Argentine peso has witnessed a precipitous decline in value, with an annual inflation rate of 276% as of February.

Conclusion

Argentina's regulatory landscape for cryptocurrencies is evolving rapidly. The government's demand for mandatory registration is a significant step that will undoubtedly shape the future of the industry in the country. While some industry leaders express reservations, the move underscores the growing momentum for regulatory oversight of the crypto sphere worldwide.