Paraguay Prepares 2020 Crypto Regulation and Crypto Firms Audits


Paraguay is preparing crypto regulations in the first half of 2020. In an attempt to regulate the crypto industry, Paraguay has decided to audit the books of the crypto firms that are active in this sector.

25 December, 2019 | AtoZ Markets – Last week, the country’s anti-money laundering (AML) chief, the Secretary for the Prevention of Money Laundering and Property (SEPRELAD), announced a nationwide crypto survey. Since Paraguay is preparing crypto regulations for 2020 and is auditing crypto firms.

Paraguay Audits Local Crypto Industry 

According to the mandatory survey, all virtual asset service providers (VASPs) in the country must reveal their books to the government. Secretary Minister Christian Villanueva told:

“The obtained data will be used to measure the level of adoption, the complexity and the size of Paraguay’s virtual asset market. It will draft a regulation which adequately regulates them and mitigates the risk of abuse”.

It never happened before in this landlocked nation, will consider to regulate the volume of 6.8 million cryptocurrencies. Since earlier on, its central bank warns the public that only Guaraní currency is legal tender. With this audit, the country aims to regulate the innovative industry by the first half of next year.

The Financial Action Task Force (FATF) first mentioned this initiative in the guidelines issued in June for the VASPs. However, that only encouraged voluntary data submission, which was to be carried out on 20 December. Recommendation 15 of the FATF guideline broadened AML benchmarks to include technologies such as “virtual assets”.

The SEPRELAD is putting Paraguay on the right track to comply with recommendation 15, before the end of 2020 with its new directive. The government is being stricter and making this measure mandatory. Under the new rules, the regulator plans to make registration compulsory for crypto-miners, over-the-counter (OTC) trading offices, exchanges and other VASPs. According to SEPRELAD, this will strengthen counter-financing of terrorism (CFT) protocols and anti-money laundering (AML) safeguards.

Read More: Bitcoin Google Searches Decline in 2019

SEPRELAD’s Audit Puts VASPs on Track in Paraguay

SEPRELAD’s audit puts VASPs on the right track for eventual inclusion in the formal financial landscape of Paraguay, says Paraguayan business analyst and Bitcoiner Stan Canova. He also said:

“Before the government took a position on crypto, the Paraguayan banking sector had excluded miners and traders who had done so. They had “the perfect excuse” to deny Bitcoiners baseline financial tools, like bank accounts.”

“The banks said [to the VASPs], ‘hey, you are not controlled by SEPRELAD. You are not under the umbrella of the law. You are, therefore, a risk”.

VASPs, therefore, store loads of money in private safes, according to Jorge Ramírez, founder of the OTC service Cripex. Ramírez and Canova both claim that members of the industry are already engaging in self-governance. However, the law does not allow them to do so. Ramirez concludes:

“Here in Paraguay, we self-regulate ourselves. And we institute the same level of compliance that banks have with their customers when it comes to KYC and AML”.

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