Argentine FinTech is being investigated by the BCRA

TL;DR Breakdown

• BCRA investigates Argentine FinTech companies for transactions in cryptocurrencies.
• The Argentine government does not clarify its position against cryptocurrencies.

The BCRA began an investigation against Argentine fintech companies. This investigation is because the Argentine government intends to regulate the cryptocurrency market in the country. FinTech companies with subsidiaries over the world have been operating in the Republic of Argentina recently.

According to the BCRA, Argentine fintech offers link services focused on the financial industry. Fintech finances investment projects using crypto assets as a savings channel. The investigation is being opened to determine if this group performs unauthorized financial intermediation.

Argentine FinTech investigation reasons

Crypto assets represent a challenge for investors, users, and the financial system. In recent years, cryptocurrencies have had great popularity, which has led many national and international companies to using the assets.

With this, the Argentine government attempts to obtain concrete evidence of unauthorized financial intermediation. The Central Bank of the Republic of Argentina is the only institution that enables or disapproves of these transactions between citizens.

The investigation covers nine Argentine fintech companies taking fiat money deposits in a bid to convert them into crypto assets. These money transfers within Argentina can have criminal consequences for those who make them.

If the government determines there are signs of unauthorized financial transactions, the BCRA will file criminal charges. The people who committed the crime are expected to suffer prison sentences of between 5 and 7 months.

Relevant points in fintech investigation by BCRA

The BCRA investigation focuses on the exchange of fiat money (Argentine pesos) or dollars to cryptocurrencies. The Argentine government is imposing rules on cryptocurrencies that are not institutionally approved.

This action by the Argentine government serves as a warning for companies in the FinTech sector that use cryptocurrencies. It is possible that these companies may be strictly regulated with their activities monitored.

This investigation will determine the cryptocurrencies future and alert numerous companies and startups with crypto assets. Given this action, the entire Argentine industry that works with cryptocurrencies set off its alarms for a possible regulation. Investors should be vigilant about when the fintech investigation ceases to know the plan of the country’s authorities.

According to the law on financial entities, the BCRA has all the authority and power to demand information when there is suspicion that a company or person carries out financial intermediation activities in a supposedly illegal way.