Argentina is considering adding solvency proof requirements to crypto regulation – Regulation
Regulators in Argentina are considering including stringent requirements in their next regulatory framework for cryptocurrencies. According to reports, institutions such as the national securities regulator CNV will look into including proof of solvency requirements for exchanges and custodians in Argentina following the demise of leading cryptocurrency exchange FTX.
Cryptocurrency exchanges may be required to complete statutory solvency verification procedures in Argentina
Argentina’s government is preparing to introduce a stringent set of regulations that crypto companies must comply with to operate in the country. According to reports from Bloomberg, the National Securities and Exchange Commission (CNV) is considering introducing solvency proof requirements for institutions that process cryptocurrency deposits for third parties.
The regulation, which is currently being worked on, will focus more on the activity of exchanges and less on the classification of crypto and tokens, according to CNV President Sebastian Negri. Negri also stated that this regulatory framework would be phased in, but did not confirm the inclusion of solvency proof requirements.
Negri clarified that all actions will be taken in cooperation with crypto companies in Argentina. He defined:
We will form a working group with the industry to agree new regulatory parameters that will include companies that meet the wealth and solvency requirements to bear the risk they take.
Proof of solvency
A solvency report registers whether an exchange or crypto company holds the amount of cryptocurrency it claims to have while maintaining its funds in the Blockchain directly and confirms that the funds are sufficient to cover the liabilities that the company represents to its customers.
The possible inclusion of such a measure in Argentina’s forthcoming crypto law would aim to avoid a situation like the demise of FTX, one of the formerly largest cryptocurrency exchanges, which filed for bankruptcy last year, leaving its customers without access to their funds.
After this event, other cryptocurrency exchanges made preparations to undertake similar initiatives voluntarily. Such is the case with Binance, Crypto.com and Kucoin, which prepared procedures to prove reserves. However, Mazars, the firm responsible for these certifications, abandoned such ventures in December, stating that it was “suspending its work with all of its crypto clients worldwide.”
Some national exchanges such as Lemon Cash have already stated that they will present this information in the coming days. “The community has lost their trust in cryptocurrency, so we need to get it back,” explained Lemon Cash blockchain manager Francisco Ladino.
What do you think of the possible inclusion of solvency requirements in Argentina’s upcoming cryptocurrency law? Tell us in the comment section below.
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Source: Crypto News Deutsch
