New reform bill to the Anti-Money Laundering Act. Crypto under the spotlight and the position of the NGO Bitcoin Argentina

Por 10 enero, 2023 No Comments

The CNV (National Securities Commission) together with the UIF (Financial Information Unit) and the Executive Branch submitted jointly, at the beginning of December, a bill for the update of anti-money laundering legislation, focused mainly on cryptoassets. As anticipated in our blog two years ago, crypto regulation is becoming essential, especially after the collapse of FTX and LUNA, urging the need for transparency and clear rules.
Regretfully, local authorities learnt nothing from previous unsuccessful crypto bills and the new draft bill has been developed without the consensus of the main referents of the crypto ecosystem, leaving them apart. A bill agreed upon between the private sector, NGOs and referents of the crypto industry would be healthier, designed for more transparency and for a better application.
The NGO Bitcoin Argentina asked for some modifications to the reform bill under analysis by the Lower House on the basis “that it will have negative effects over many legal and transparent activities carried on by a lot of people within the crypto industry, that represents a thriving sector of the national economy.” Through a press release, the NGO reported that “even though they support an updated legislation for the prevention of money laundering and terrorism financing, the modifications included in the reform bill do not foresee the negative impact it will have over the Argentine economy”.
Two modifications were proposed by the NGO to the draft bill that was submitted by the local authorities aiming to meet the international standards proposed by the Financial Action Task Force (FATF) to combat money laundering. First, the NGO Bitcoin Argentina requested to exclude minor players -as for example those individuals involved in crypto exchange individually or in
P2P transactions- from the category of obliged entities, releasing them from the obligation to report to the Financial Intelligence Unit (FIU)
A huge crypto community has developed in our country formed by individuals and micro-enterprises committed to crypto exchange services (exchange of crypto assets for fiat money and viceversa or for other crypto assets) through P2P (or person-to-person) transactions. Those involved in these transactions can carry on these activities as final consumers or as retail trading services for profit in a small scale. They are entrepreneurs, students, employees or unemployed individuals committed to crypto trading to get an extra income.
The NGO reported that “there is no sense in considering these minor transactions as a serious threat to anti-money laundering and terrorism financing according to the risks assessment standards promoted by GAFI”.
Regardless of the position of the NGO, the expert Juan Félix Marteau made some statements to Infobae reporting that the society deserves to have State protection through substantial institutional changes and not with superficial legal reforms. Juan F. Marteau is an expert in Assets Laundering Prevention and, in his opinion, the spirit of the draft bill does not address deep issues; it is rather a poor bill, badly drafted, proposed to meet abstract international standards. To make matter worse, it is intended to be used as a bargaining chip in exchange for the alleged tax information exchange agreements. Moreover, he stated, “We tend to turn strategic issues such as the combat and prevention of money laundering and terrorist financing into minor matters. This conduct reflects our deficiencies in foreign policies and our neglect to fight emphatically against
criminal organizations operating in Argentina and in the region as well”.
In his opinion, the draft bill needs to be improved. He stated, “Our legislators are supposed to legislate for the benefit of our Nation’s interests”. He further stated that this implies the creation of suitable tools and instruments to provide greater peace and security to our nation. Argentina has to face many challenges in this sense such as to reorganize intelligence services (destroyed), the security system (in a coma) , the defense system (disaffected) and the criminal justice system
(collapsed). We have to share these concerns altogether, without ideological cracks, to overcome these deficiencies. We have to commit ourselves to the creation of an inclusive and healthier economic system and, in this sense, the new technologies available can be helpful to include everybody in financial transactions (with virtual wallets, etc.). But it is mandatory to reformulate completely the traditional policy on transactions monitoring rules.
Even tough, we stick to the concepts of our colleague. In our opinion, the draft bill is ambiguous and lacks technical accuracy, pursuing minor factors related to money laundering. If the bill succeeds, the crypto retail market could be affected negatively, leaving aside effective actions to combat money laundering and terrorism financing that shift and evolve constantly outside the
crypto ecosystem.