While criminal complaints against President Javier Milei and others over the $LIBRA crypto scam pile up in Argentine, Spanish, and U.S. courts, a national watchdog agency has begun policing the country’s cryptocurrency sector. 

On March 14, National Security Commission (CNV) — the Argentine equivalent of the United States’ Security and Exchange Commission (SEC) — rolled out its first regulations on cryptocurrencies one month after President Javier Milei promoted $LIBRA, a digital token that ended up costing investors hundreds of millions of dollars.

The new regulation, passed last week in general resolution 1058, represents the country’s first on Virtual Asset Service Providers — crypto exchanges or wallets. Now, each will have to register with the commission in order to operate within the country.

Although the CNV had reportedly been discussing possible measures for the better part of a year, two separate sources with knowledge on the matter told the Herald that language was “refined” and even “added” to the resolution in the wake of the so-called crypto scandal.

One such addition was article 37, which forbids exchanges from offering cryptoassets similar to the $LIBRA token. This demands that cryptoassets have a “white paper” or basic background information about the issuer. Assets less than 90 days old must also contain a warning that they might entail “volatility” and a “risk of loss of the total amounts allocated to such assets.” 

These assets must be presented in a designated section on all platforms, at least for a period of time. However, Roberto Silva, head of the CNV, said on Wednesday during an event with the crypto community that the regulation will apply to memecoins.

“About 10 days ago, the SEC issued a communiqué that is totally in line with what we have been saying, and that is that memecoin is not a tradable security. Therefore, neither the CNV nor the SEC should intervene,” Silva said, before adding that memecoins do not guarantee profit.

Memecoins are cryptocurrencies that often reference viral Internet jokes. When $LIBRA was launched, some people said it was a memecoin. Some disagreed, as Milei said the token “would allow investors to fortify the Argentine economy by funding small businesses.”

Silva noted that Argentina began discussing the need for regulation after the Financial Action Task Force (FATF), An intergovernmental organization created to stop money laundering, threatened to include Argentina in its “gray list” of countries that do not comply with international standards for combating terrorist financing. Countries in the gray list suffer from increased financial scrutiny by international entities and restrictions on foreign investments.

“A study by the International Monetary Fund says that the countries that are placed on [the list] show a decrease of around 5, 7% of their gross domestic products,” Alberto Mendoza, head of Argentina’s Financial Information Unit (UIF), said during the event.

In March 2024, after a FATF visit, the government appointed the CNV as regulator of Virtual Asset Service Providers. The CNV started working on the regulation’s fine print shortly thereafter.

To register as Virtual Asset Service Providers, Silva explained, exchanges must contain a “point of contact with Argentina.” This includes domains ending in .ar, products that are directed at or advertised to Argentines, and ones for which 20% of the billing originates in Argentina.  

A source in the industry welcomed the initiative but said that what exchanges are looking for is a tax reduction. The source added that some small virtual asset providers will escape regulation, as the CNV requires a US$35,000 minimum capital to be added to the registry.

While the previous administration did not regulate the crypto business, they said, Milei’s government has “at least provided a professional football field where before you had a neighborhood court.”