On October 17, 2024, through General Resolution No. 1025/2024 (the “Resolution”), the National Securities Commission (the “CNV”) called the general market to submit opinions and proposals on a draft regulation applicable to Virtual Asset Service Providers (the “VASPs”), allowing for a 30-business-day public consultation period during which submissions can be made through the CNV website.
The draft regulation would introduce new elements not included in CNV Resolution No. 944/2024, which established the Registry of Virtual Asset Service Providers (the “VASP Registry”), such as:
- A list of persons that may not operate as a VASP or perform activities of a VASP, namely: (i) natural or artificial persons registered with the CNV as a market, clearinghouse, agent, or any other person subject to its supervision under the Capital Markets Act, and (ii) natural or artificial persons subject to specific regulations that restrict them from operating as VASPs.
- New requirements for applying for registration in the VASP Registry, among the most relevant aspects are the following: (i) identification of the starting date of activities, (ii) an affidavit from the VASP’s authorities indicating they have not been convicted of money laundering offenses, (iii) the date of the fiscal year’s closure and proof of the applicable minimum net worth, (iv) minutes from the administrative body confirming that VASP has the necessary administrative structure to operate as such, and (v) identification of the individuals responsible for compliance within VASPs duties with the CNV.
- VASPs established abroad must register with the Office of Companies in Argentina in accordance with Section 118 of the Argentine Companies Act, under one of the recognized forms (e.g., branch, office, or another form of permanent establishment).
- VASPs categories[1]:
- Category 1: Exchange between virtual assets and legal tender (fiat currency).
- Category 2: Exchange between one or more forms of virtual assets.
- Category 3: Transfer of virtual assets.
- Category 4: Custody and/or management of virtual assets or instruments that allow control over them.
- Category 5: Participation and provision of financial services related to the offering and/or sale of a virtual asset by an issuer.
- VASPs must maintain clear separation and identification of the funds involved in their commercial activities, distinguishing funds used in their clients’ transactions from those used in their own transactions.
- Both when applying for registration at the VASP Registry and as long as they are registered as VASPs, they must maintain a minimum net worth based on their category. For VASPs applying for registration under multiple categories, the highest applicable minimum net worth will be required.
As of the date of this report, the minimum net worth requirements would be as follows:
Categories 1 and 2: USD 87,210 (eighty-seven thousand two hundred ten U.S. dollars).
Categories 3 and 4: USD 174,402 (one hundred seventy-four thousand four hundred two U.S. dollars).
Category 5: USD 43,600 (forty-three thousand six hundred U.S. dollars).
- VASPs must submit quarterly, semiannual, and annual reports to the CNV detailing their operations, clients, and minimum net worth.
- VASPs must have:
- Regulatory Compliance and Internal Control Officer.
- Public Relations Officer.
- Information Security Policies.
- Procedures Manual for handling virtual asset orders and transactions, accessible to the CNV. This manual should record and preserve, at a minimum, the date, time, amount, and type of virtual asset involved, as well as client identification for each transaction.
- Cyber-security Procedure.
The regulation provides a compliance period for VASPs that have not adapted their registration in the PSAV Register of (i) 180 calendar days from the date of entry into force for VASPs established in the country, and (ii) 270 calendar days from the date of entry into force for VASPs established abroad. After this period, the CNV will require deregistration from the VASP Registry for those failing to meet the new requirements. [1] Individuals will only be allowed to engage in activities outlined in categories 1 and 2.
