New UIF regulation for virtual asset service providers (VASPs) and establishment of VASP registry
Banking & Financial Institutions Department Report | New UIF regulation for virtual asset service providers (VASPs) and establishment of VASP registry
Dear all,
In accordance with our newsletters dated March 18 and March 27, 2024, we hereby inform you about the approval of General Resolution No. 994 (the “Resolution”) by the National Securities Commission (the “CNV”), published in the Official Gazette on the date hereof. The Resolution, in line with the provisions of Law No. 27,739 (the “Law”), establishes the Registry of Virtual Asset Service Providers (the “Registry” and “VASPs,” respectively), to which all VASPs conducting activities in Argentina must register through the CNV’s website.
According to the Resolution, the Registry is established solely for the purpose of monitoring VASPs as AML obliged entities before the Financial Information Unit (“UIF”), and does not constitute the granting of a license to operate in the Virtual Assets market. In other words, there is currently no specific CNV regulation regarding the activity of VASPs in the capital market.
However, the Resolution sheds some light on which entities are subject to the registration requirement. For the moment, the Resolution does not stipulate that VASPs operating from abroad must establish a local entity to register.
In this regard, any individual (resident or foreign) or entity operating as a VASP (constituted in Argentina or abroad) must be registered in the registry before engaging in the following activities:
– Exchange between virtual assets and fiat currencies;
– Exchange between one or more forms of virtual assets;
– Transfer of virtual assets;
– Custody and/or administration of virtual assets or instruments enabling their control; and
– Participation in and provision of financial services related to the offering of an issuer and/or sale of a virtual asset.
The Resolution exempts from the registration obligation those VASPs whose activity does not exceed the threshold of 35,000 UVAs per calendar month.
Furthermore, it establishes that activities are considered to be conducted in Argentina if:
– Domains with the “.ar” termination are used to carry out activities or operations.
– Commercial agreements with third parties, subsidiaries, or affiliates allow for the receipt of funds or assets locally from Argentine residents to carry out activities or operations, including those known as onboarding services.
– There is a clear targeting of activities or operations towards residents of the Argentine Republic.
– Advertising is clearly directed at residents in Argentina.
– The volume of business in Argentina exceeds 20% of the entity’s total business volume, considering only the business volume of the activities for which registration in the Registry is required.
Individuals and legal entities domiciled, incorporated, or residing in domains, jurisdictions, territories, or associated states listed as non-cooperative jurisdictions, for tax transparency purposes, in accordance with Article 24 of the Annex to Decree No. 862/2019 and its amendments, and deemed Non-Cooperative or High-Risk by the Financial Action Task Force (FATF), may not register in the Registry.
Finally, individuals or entities currently engaged in any of the activities requiring registration in the Registry have until May 9, 2024, to do so.
We remain at your disposal for any inquiries or additional information you may require.
Sincerely,
Luciana Denegri
Felipe Videla
Daniel Levi