Cryptocurrency Regulatory Landscape in Argentina Prior to 2024

The legislative landscape for cryptocurrencies in Argentina prior to 2024 was characterized by an increasing adoption and a nuanced regulatory approach. Argentina experienced a significant rise in cryptocurrency usage, with over 1.3 million people, or approximately 2.94% of its population, adopting crypto. This uptick was partly due to strict controls over foreign currencies by the Argentine government, aimed at protecting the country from inflation and circumventing prohibitions and transfers of foreign currency outside its borders. Despite these controls, Argentina emerged as a regional leader in the area of cryptocurrency, although cryptocurrencies are not recognized as legal tender in the country.

The legal status of cryptocurrencies in Argentina was not explicitly defined as prohibited, thus allowing for their legal use. However, regulations concerning cryptocurrency were mainly focused on taxation and preventing money laundering and financial terrorism. There were no specific regulations on the issuance, exchange, or use of cryptocurrency. Furthermore, the National Securities Commission (CNV) issued warnings about the risks of initial coin offerings (ICOs) and stated that some ICOs may be subject to CNV control, based on their characteristics and structure. In May 2021, the CNV, together with the Central Bank of Argentina, issued a joint statement warning about the risks and implications of using and investing in crypto assets.

Regarding taxation, income derived from holdings or disposal of virtual currency by issuers located in Argentina is considered as Argentina-source income, subject to specific tax rates for individuals and legal entities. Worldwide assets of Argentine residents are also subject to personal tax at varying rates based on the overall asset value.

Crypto mining was permitted in Argentina, with no specific rules or regulations. The country experienced a boom in crypto mining due to cheap subsidized energy, with towns like Serodino using mining to fund infrastructural upgrades.

In 2023, Argentina’s National Securities Commission (CNV) was in the process of establishing and regulating requirements for crypto companies. This initiative was part of a reform in the money laundering prevention law being discussed in the Argentine Congress. The CNV aimed to include protection for users, ensure security and efficiency in operations, safeguard public savings, and prevent money laundering. These efforts were aligned with international standards set by the Financial Action Task Force, which was expected to conduct an evaluation in Argentina in 2024.

In summary, Argentina’s approach to cryptocurrency regulation prior to 2024 can be characterized as cautious yet progressive, recognizing the growing importance of digital assets while striving to ensure their responsible use and integration into the wider financial system​​​​.