Regulation of crypto Currencies in the Americas


The American continent is home to several major jurisdictions, starting with the US, which is the country to watch when it comes to most financial innovations and initiatives. Major economies such as Canada, Mexico, Brazil and Argentina need to be reckoned with as well.

The following is a short overview of the regulatory situation of cryptocurrencies in the Americas.

United States – The United States is yet to come up with a comprehensive regulatory framework at Federal level, although US Congress held several hearings related to cryptocurrencies and recent reports hints towards possible federal proposal which may be debated soon. Still at Federal level, the Financial Crimes Enforcement Network (FinCEN) has already delineated the main actors of this industry and some broad principles to regulate them, starting with AML duties Imposed on various actors through the issuance of rulings and orders.

It is important to point out the recent decision by the US Federal Securities regulator, the SEC, to review its decision not to approve a bitcoin based Exchange Traded Fund (ETF) while simultaneously considering the application for admission to trading of an Ethereum based ETF.

In the absence of a firm federal statement, the floor was left open to State level interpretations and initiatives. The first state to step in was the State of New York, by adopting a specific regime called “Bitlicense”, with its final rules published in 2015. The rules address matters such as capital requirements, custody and protection of customer assets, reports and financial disclosures, anti-money laundering program, cyber security program, business continuity and disaster recovery, advertising and marketing and consumer protection.

While New York is leading the way, it is certainly not alone and many other US states, such as California, Arizona and Washington, are in the midst of enacting applicable regulatory frameworks to crypto currencies activities.

Canada – Canada has not taken any concrete steps towards regulating cryptocurrencies and reportedly cryptocurrency exchanges are not bound to any AML duties. Positive sign of acceptance can be found in a working paper published by the central bank of Canada in August 2016 suggesting that if should adoption of cryptocurrencies increase, it is likely to cause cryptocurrency exchange rates to be less volatile.

Brazil – In Brazil, the Central Bank of Brazil has declared that it does not regulate cryptocurrencies, and has warned investors against the implications of such activity. On the other end, Brazilian tax authority have imposed a reporting duty of bitcoin holdings and payment of capital gains taxes for holders of bitcoin over certain value thresholds.

Mexico – The Central Bank of Mexico held itself to warning investors against the risks of trading in cryptocurrencies.

Argentina – In Argentina, while crypto currencies are not considered legal tender in the country, financial institutions as well as profit and non-profit entities are required to report all transactions involving crypto currencies on a monthly basis to the local Financial Intelligence Unit.

Ecuador – has decided to launch its own digital currency initiative, which will be used as the country’ legal tender. In parallel, it has banned the use of all other cryptocurrencies. Since the legal tender of Ecuador is the US dollar, it has been stated that the country’ new digital currency will be equivalent and convertible to the US Dollar.

Bolivia – In Bolivia, the Central Bank of Bolivia issued a ban against any currency or coins not issued or regulated by the government, including a list of cryptocurrencies, which are not allowed to be traded in its territory.

As the regulatory landscape for cryptocurrencies is still developing there will certainly be further changes, developments and more regulatory possibilities further on. The Porat Group team specializing in cryptocurrencies is constantly keeping up to date with all these changes and will be amending our website to reflect these changes, when significant, as well.

Porat Group has a team dedicated specifically to the cryptocurrency industry and was one of the first law firms to offer legal services, such as regulation services, for this industry. Our lawyers have all the necessary knowledge for handling regulation processes in various jurisdictions worldwide, including in the Americas.

Our commitment to the cryptocurrency industry is also manifested in the fact that we accept payments in several cryptocurrencies in return for the provision of our legal services, be they related to the cryptocurrency industry or not.

We welcome all business owners who are active in the cryptocurrency field and are interested in knowing more about regulating their business and/or their product to contact us for a free and non-binding consultation in order to find out more.