Regulators in Argentina are considering including strict requirements in their upcoming cryptocurrency regulatory framework. Institutions such as the national securities regulator, the CNV, will reportedly study including proof of solvency requirements for exchanges and custodial institutions in Argentina, following the demise of major cryptocurrency exchange FTX.
Cryptocurrency exchanges might have to complete solvency test procedures by law in Argentina
The government of Argentina is preparing to launch a set of strict regulations that crypto companies will have to comply with to operate in the country. According reports From Bloomberg, the national securities regulator (CNV) is considering the introduction of proof of solvency requirements for institutions that handle cryptocurrency deposits for third parties.
The regulation currently being worked on will be more focused on the activity of exchanges and less on the classification of crypto and tokens, according to statements by the president of the CNV, Sebastián Negri. Negri also explained that this regulatory framework will be applied progressively, but did not confirm the inclusion of proof of solvency requirements.
Negri clarified that all measures will be taken in a joint effort with crypto companies in Argentina. He declared:
We will create a working group with the industry to agree new regulatory parameters, which will include companies that meet the asset and solvency requirements to support the risk they assume.
solvency test
A proof of solvency report records whether an exchange or crypto firm holds the amount of cryptocurrency it claims to hold, while directly looking at its funds on the blockchain, certifying that the funds are sufficient to cover the liabilities the firm presents to its customers. customers.
The possible inclusion of this type of measure in the upcoming Argentine crypto law would aim to prevent a situation like the disappearance of FTX, previously one of the largest cryptocurrency exchanges, which filed for bankruptcy last year, leaving its clients without access. to your funds
After this event, other cryptocurrency exchanges prepared to carry out similar initiatives on a voluntary basis. This is the case for Binance, Crypto.com and Kucoin, which were preparing test reserve procedures. However, the company responsible for these certifications, Mazars, abandoned such commitments in December, stating that it would “stop its work with all of its crypto clients globally.”
Some national exchanges like Lemon Cash have already stated that they will present this information in the coming days. “The community has lost trust in cryptocurrencies, so we have to get them back,” declared Lemon Cash blockchain manager Francisco Ladino.
What do you think about the possible inclusion of proof of solvency requirements in the next cryptocurrency law in Argentina? Tell us in the comment section below.
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