Argentina Considers Inclusion of Proof-of-Solvency Requirement in Crypto Regulation – Regulation of Bitcoin News

Regulators in Argentina are considering including strict requirements in their next cryptocurrency regulatory framework. According to reports, institutions such as the national securities regulator, CNV, will study the inclusion of proof-of-solvency requirements for exchanges and depository institutions in Argentina, in the wake of the demise of leading cryptocurrency exchange FTX.

Cryptocurrency exchanges may be required to complete proof-of-solvency procedures by law in Argentina

The government of Argentina is preparing to launch a set of strict rules that crypto companies must adhere to in order to operate in the country. According to reports from Bloomberg, the National Securities Supervisory Authority (CNV) is considering the introduction of proof-of-solvency requirements for institutions handling cryptocurrency deposits for third parties.

The regulation that is now being worked on will focus more on the activity of exchanges and less on the classification of cryptos and tokens, according to CNV president Sebastian Negri’s statements. Negri also explained that these regulations will be applied in a progressive manner, but did not confirm the inclusion of proof-of-solvency requirements.

Negri clarified that all measures will be taken in joint efforts with crypto companies in Argentina. He declared:

We will establish a working group with the industry to agree new regulatory parameters, which will include companies meeting the requirements for assets and solvency to support the risk they undertake.

Proof of solvency

A proof-of-solvency report records whether an exchange or crypto company has the amount of cryptocurrency it claims to have, while looking directly at its funds in the blockchain, certifies that the funds are sufficient to cover the obligations the company presents to its customers.

The possible inclusion of this type of measure in the upcoming Argentine crypto law would aim to avoid a situation like the demise of FTX, formerly one of the largest cryptocurrency exchanges, which filed for bankruptcy protection last year, leaving its customers without access to their funds.

Following this incident, other cryptocurrency exchanges made preparations to implement similar initiatives voluntarily. This is the case with Binance, Crypto.com and Kucoin, which prepared procedures for proof-of-reserves. However, the firm responsible for these certifications, Mazars, abandoned such commitments in December, indicating that it would “pause its work with all of its crypto clients globally.”

Some national exchanges such as Lemon Cash have already stated that they will present this information in the coming days. “Society has lost trust in cryptocurrency, so we need to get it back,” declared Lemon Cash’s blockchain manager Francisco Ladino.

What do you think about the possible inclusion of proof-of-solvency requirements in the upcoming cryptocurrency law in Argentina? Tell us in the comments section below.

Sergio Goschenko

Sergio is a cryptocurrency journalist based in Venezuela. He describes himself as late to the game, entering the cryptosphere when the price spike occurred during December 2017. He has a computer engineering background, lives in Venezuela and is influenced by the cryptocurrency boom on a social level, offering a different point of view on crypto success and how it helps the unbanked and underserved.

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