Argentina Tightens Grip on Booming Crypto Market Amid Money-Laundering Concerns

A new Argentine law aims to regulate the country's booming cryptocurrency market to combat money-laundering risks. The government signed a fiscal package including tax amnesty for registered crypto assets. Experts see this as a step toward appeasing the Financial Action Task Force, which has threatened increased monitoring.

Argentina is set to implement a new law intended to regulate its burgeoning cryptocurrency market, a move aimed at reducing money-laundering risks associated with digital assets, according to expert reports.

In the past year, Argentina has witnessed crypto transactions totaling $85.4 billion, making it one of the world's leading crypto markets. This surge is largely driven by Argentines looking to circumvent triple-digit inflation and a weakened local currency. Recently, the Argentine government introduced a fiscal package incorporating tax amnesty for individuals declaring up to $100,000, including registered crypto assets.

Roberto Silva, President of the National Securities Commission, emphasized that tax amnesty could alleviate pressures from the Financial Action Task Force (FATF), linked to organizations like the World Bank, IMF, and United Nations, to regulate Argentina's crypto market. Silva stated, "Today, we are focused on addressing issues related to money laundering and reporting entities."

The FATF has signalled the possibility of moving Argentina to its grey list, a designation that entails increased monitoring and could deter foreign investments, raise international interest rates, and risk a GDP decline, as analyzed by the IMF. Registering crypto assets is seen as the initial step towards regulation, likely to align with U.S. practices.

Ignacio Gimenez, Executive Director at Lemon Cash, a top crypto exchange in Argentina, noted that the exchange has adapted its system to allow users to voluntarily register their assets with the government. Earlier this year, Argentina ramped up its crackdown on crypto-related crimes, conducting 64 raids that led to 30 arrests linked to smuggling, money laundering, and illegal gambling.

Argentine officials are scheduled to meet with the FATF in Paris in October to further evaluate the country's efforts against money laundering and terrorist financing.

(With inputs from agencies.)