The BCRA, Argentina’s Central bank has launched an investigation of nine Fintech terms under the allegations of providing unauthorized financial intermediation with digital assets. Should the allegations be proven, the BCRA will follow up on the initial criminal complaints made against the companies.
According to BCRA’s statement, the companies have been converting deposits into digital assets and cryptocurrencies. The digital assets were used to fund both the investments by holders and consumer finance with the promise of profit as a counterparty.
While the name of the companies under investigation has not been named by BCRA, a spokesperson for the central bank stated the BCRA is in the process of notifying the nine companies. According to the spokesperson, the process will take roughly a week to be completed, and the companies will be notified by the end.
Since the Argentinian regulators had yet to manage the crypto space, it was natural for some firms to allegedly offering interest on crypto holdings for any depositor. The National Securities Commission along with the Central Bank, have warned investors to be prudent of their crypto investments.
The central bank has the authority to acquire information on an individual or a company if they are suspected of carrying out financial intermediation tasks. The BCRA is free to launch an investigation on any company or individuals deemed suspicious due to the law on financial entities.
If the investigations result in insufficient evidence of illegal financial intermediation, the central bank can file criminal charges under Article 310 of the criminal code. According to the code, financial entities will be sentenced to 1 to 4 years in prison and charged with a fine amounting to 2 to 6 times the value of the transactions. Moreover, the entity will be disqualified from operating in Argentina for 6 years.
