Argentina’s Central Bank, El BCRA, has launched an investigation against 9 fintech companies that are allegedly involved in criminal activities. According to a statement issued by the institution, these companies act as illegal financial intermediaries and use cryptocurrencies for this.
Argentina’s Central Bank hits cryptocurrency fintechs
Reportedly, the companies mentioned in the announcement transform their deposit funds into cryptocurrency assets that are further used in investments and “consumer finance”. These suspicious, according to the central bank, transactions are organized by “disguised” fintech companies and generate a source of “side income” for them. The central bank has yet to disclose the names of these 9 companies.
Criminal charges may be brought against these companies
Under Argentine law, the Central Bank is to prohibit those companies that engage in unauthorized financial intermediation. In addition, it can impose sanctions on their activities. The companies are reportedly expected to receive notification of the above soon.
Thanks to the collected evidence, the BCRA has the right to apply Article 310 of the Argentine Penal Code against fintechs and bring charges against companies. This may result in them being fined up to 6 times the amount of illegal transactions. The decision-makers are threatened with imprisonment from one to four years. In addition, companies may be forcibly closed.
Cryptocurrency adoption in Argentina
In 2020, Argentina began to heavily regulate the cryptocurrency market. The government has even enacted tax laws that allow it to monitor the digital currency market and the transactions carried out by investors.
However, the popularity of cryptocurrencies in the country is still high, and for good reason. Argentine citizens are hampered by economic problems. Inflation makes a national currency worth little.
It even happened that in May the Argentine government of President Alberto Fernández announcedthat all meat exports will be banned for the next 30 days. All this to slow down inflation. Due to the demand for Argentinian meat, its price in the country increased by more than 20% within a month. It is said that the suspension of exports is officially expected to last 30 days, but, according to the media, it will rather last “Until the domestic market is put in order.”
At the same time, BTC mining is flourishing in the country, which we wrote about here.