Cryptocurrency Regulation in Peru Prior to 2024
As of 2023, Peru’s approach to cryptocurrency regulation was marked by an absence of specific legislation or rules governing the crypto-asset market. The country’s regulatory environment for cryptocurrencies and related platforms was undeveloped, with no concrete legal framework addressing this emerging sector.
Lack of Specific Cryptocurrency Regulation
Peru had no distinct regulation for cryptocurrencies, crypto marketplaces, exchanges, and trading platforms. Consequently, there was no regulation concerning different classes of digital assets. This lack of specific rules extended to order handling for crypto-assets or virtual assets, and no regulations existed for peer-to-peer trading platforms. The absence of regulation meant that there were no guidelines or protections in place regarding the execution of customer trades in the cryptocurrency space.
Legislative Proposals and Market Integrity
In December 2021, a bill titled “Ley Marco de Comercialización de Criptoactivos” (Framework for the Commercialization of Cryptoassets) was proposed in the Peruvian Congress. This bill aimed to establish a regulatory framework for trading cryptocurrencies and other cryptoassets, as well as to provide oversight for crypto-exchanges. The proposal included provisions for both banking and non-banking entities to offer cryptocurrency services, such as custody, exchange, and staking. Key requirements included registration with the Superintendency of Banking, Insurance and Pension Fund Administrators (SBS) and enrollment in a registry of cryptocurrency exchange platforms. The bill also suggested that crypto exchanges should report suspicious activities or unusual transactions to the Financial Intelligence Unit of Peru (UIF-Perú). However, as of 2023, this bill remained in the proposal stage and was not expected to pass into law.
Securities Market Law and Crypto-Assets
Peru’s Securities Market Law laid down fundamental principles for market integrity and market abuse that regulated trading activities. These principles encompassed the quality of information, market transparency, publicity, and prohibited acts or conduct that could undermine market integrity. However, it is important to note that these provisions were applicable only to public offerings of securities and their issuers, as defined by the law, and did not extend to crypto-assets or virtual assets.
Conclusion
Before 2024, the legislative landscape for cryptocurrencies in Peru was characterized by a significant gap. The absence of specific regulations for crypto-assets and related activities created an environment of uncertainty and risk for participants in this market. The proposed “Ley Marco de Comercialización de Criptoactivos” indicated a potential shift towards a more structured approach to crypto regulation, but its future remained uncertain. Consequently, the lack of clarity in the legal framework left market participants navigating the crypto space without definitive guidance or protection under Peruvian law.