Argentina looks to tame crypto market as money-laundering fears draw scrutiny

By Noelle Harff

(Reuters) – A new law could help Argentina regulate its fast-growing cryptocurrency market as it aims to reduce risks such as money laundering associated with digital assets, experts say.

Last year, Argentina traded $85.4 billion worth of cryptocurrencies, according to data platform Chainalysis, making it one of the world’s biggest crypto havens, as Argentines struggle to cope with triple-digit inflation and a struggling currency.

The Argentine government signed a fiscal package on Wednesday that includes a tax amnesty for individuals who declare up to $100,000, including registered crypto assets.

Roberto Silva, head of the National Securities Commission, said the amnesty could ease pressure from the Financial Action Task Force (FATF), an agency affiliated with the World Bank, IMF and the United Nations, to regulate Argentina’s cryptocurrency market.

“Today, we are focused on changing everything that has to do with money laundering and whistleblowing organizations,” Silva said.

FATF has threatened to greylist Argentina, an IMF analysis shows, a move that could lead to increased surveillance of the country, discourage foreign direct investment, raise international interest rates and risk a decline in GDP.

Silva said the registry of crypto assets was the first step toward regulation, hinting that the rules would likely follow those set by the United States.

Ignacio Gimenez, the director of Lemon Cash, one of Argentina’s largest cryptocurrency exchanges, said the exchange has updated its system that allows users to voluntarily register their assets with the government.

In May and June, Argentina intensified its crackdown on crypto-related crimes, with prosecutors conducting 64 simultaneous raids resulting in 20 domestic and 10 international arrests linked to smuggling, money laundering, and illegal gambling.

Argentine leaders will meet with the FATF in Paris in October, where the task force will continue to assess the level of money laundering and terrorist financing in Argentina.

(Reporting by Noelle Harff; Editing by Alexander Villegas and Rod Nickel)