On October 17th, 2024, General Resolution No. 1025/2024 issued by the Argentine National Securities Commission’s (“CNV”, for its Spanish acronym) was published in the Argentina Republic’s Official Gazette, through which the draft regulations on Virtual Asset Service Providers (“VASP”) are proposed to the general public through the “Participatory Policy Development” procedure, inviting the general public to express opinions and proposals. The term for submitting comments to the CNV will be of 30 business days, starting on October 21st until December 2nd, 2024 including.
Obligation to register in the ‘Virtual Asset Service Providers Registry’.
Section 4º bis of law No. 25,246, as amended by law No. 27,739, defines a ‘Virtual Asset Service Provider’ as any individual or legal entity that, as a business, carries out one or more of the following activities or operations for, or in behalf of, another individual or legal entity: (i) Exchange between virtual assets and legal tender (fiat currencies); (ii) Exchange between one or more forms of virtual assets; (iii) Transfer of virtual assets; (iv) custody and/or management of virtual assets or instruments that allow the control over such assets and (v) Participation and rendering of financial services related to the offer of an issuer and/or sale of a virtual asset.
The CNV, through General Resolution No. 994/2024, established the requirements for registration in the Virtual Asset Service Providers Registry (the “Registry”), prior to carrying out said activities or operations.
In this framework, the General Resolution 1025/2024 establishes the parameters and principles that must be met by VASPs for the provision of services.
Exception to the obligation to request registration in the Registry.
The General Resolution No. 1025/2024 provides that the VASPs that carry out activities or operations included in the definition of VASP are exempt from the obligation to register in the Registry, provided that said activities or operations do not exceed, in aggregate, an amount equivalent to Purchasing Value Units (Unidades de Valor Adquisitivo, “UVA”) -updated by the Reference Stabilization Coefficient (Coeficiente de Estabilización de Referencia, “CER”) as per law No. 25,825-Thirty Five Thousand (UVA 35,000) per calendar month.
Additionally, the General Resolution 1025/2024 provides that the legal definition of PSAV does not include, and are therefore except from the obligation to request registration in the Registry, the individual or legal entity that carry out on their own behalf (i.e. in a personal capacity), exchange between virtual assets and legal tender (fiduciary currency) and/or exchange between virtual assets, regardless of the amount, as well as the individual or legal entity receiving virtual assets as consideration for the sale or render of their products or services, regardless of the amount involved.
Framing of legal entities incorporated outside Argentina Republic as VASP.
The General Resolution 1025/2024 provides that a legal entity incorporated outside Argentina will be understood to carry out activities of operations in a country included in the definition of VASP when they are carried out under any of the modalities mentioned below: 1. That they use any “.ar” domain to carry out their activities or operations. 2. That they have commercial agreements with third parties or subsidiaries or affiliates that allow them to receive funds or assets locally from Argentine residents for the performance of activities or operations (or any similar activity known as ‘ramp services’). 3. That they have a clear targeting of residents in the Argentine Republic. 4. That they carry out advertising clearly directed at residents in Argentina Republic. 5. That their business volume in Argentina exceeds twenty percent (20 %) of their total business volume. For this purpose, only the aggregate business volume of the activity or activities for which they must be registered in the Registry will be considered.
Excluded subjects.
The following may not operate as VASPs or carry out the activities carried out by VASPs:
a) Individual or legal entities who are registered before the CNV as markets, clearing houses, agents and/or any other subject under the CNV’s supervision in accordance with the regime of law No. 26,831 (the “Capital Markets Law”).
b) Individual or legal entities subject to a specific regulation that does not allow their operation as VASP.
c) Legal entities domiciled, incorporated, or residing in domains, jurisdictions, territories or associated states that are included in the list of non-cooperative jurisdictions for the purposes of fiscal transparency, in accordance with Section 24 of the Annex to Decree No. 862/2019 and that are considered Non-Cooperative or High Risk by the Financial Action Task Force (FATF).
Duty to inform about registration in the Registry.
Individual and legal entities registered in the Registry must clearly indicate on their website and in any social network or other media related to their activity, including materials for its diffusion and/or promotion, a legend containing the corporate name or the name and surname, as appropriate, followed by the phrase: “Virtual Asset Service Provider (PSAV)” and the registration data before the CNV’s Virtual Asset Service Provider Registry.
Requirements for the registration in the Registry.
VASPs shall request registration in the Virtual Asset Service Provider Registry, having to comply with the filing of documents and compliance of requirements that vary depending on whether the applicant is an individual or legal entity.
Among them, the most notable are the obligation to file the appointment of a Regulatory Compliance and Internal Control Officer and a Public Relations Officer.
The General Resolution 1025/2024 provides that individual or legal entities requesting registration must have procedure manuals for the processing of operations, information security policies approved by their governing body, and procedures related to cybersecurity and computes systems, which must guarantee the principles of consumer protection, equity, efficiency, transparency, non-fragmentation and reduction of systematic risk. All the aforementioned must be at the CNV’s disposal.
Types of categories.
The General Resolution 1025/2024 distinguishes four categories under the Registry, which may be used by VASPs to develop their activities and request registration. Among them, the following categories are mentioned:
1st category: Under this category, the exchange between virtual assets is permitted, as defined in Section 4º bis of law No. 25,246, as amended by law No. 27.739 (the “Virtual Assets”) and legal tender (fiat currencies).
2º category: It allows the exchange between one or more forms of Virtual Assets.
3º category: It encompasses the transfer of Virtual Assets.
4º category: It permits the custody and/or the administration of Virtual Assets or instruments that allow control over these.
5º category: It includes the participation and provision of financial services related to the offer and/or sale of a Virtual Asset by an issuer.
Individuals may only carry out the activities provided for in categories 1º and 2º.
The General Resolution 1025/2024 entered into force as of October 21st, 2024.
Please click here to access to the Resolution 1025/2024.
This publication was prepared based on information dated October 25th, 2024 and does not constitute a legal opinion on specific matters. If necessary, specialized legal advice should be sought.
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