Regulation of the cryptocurrency market is constantly becoming stricter. Nowadays jurisdictions impose high regulatory and risk management requirements on virtual asset service providers.
Despite this, we always manage to find a solution that suits the client. All the time our team provides research of the market and regulations on various markets to find the best jurisdiction. Recently we have made the global overview of the VASP regulation in the Latam Countries and are ready to share information with our future and existing clients. Today we will look at the features of obtaining a cryptocurrency license in Puerto Rico.
The law regulating the activities of VASPs
Act 273 on regulation of the International Financial Center
VASP regulator
Office of the Commissioner of Financial Institutions “OCFI”
Activities included in VASP services
The OCFI can authorize any activities unless the VASP:
1. Offer services to domestic persons.
2. Operate as an exchange office of e-currency and digital assets.
VASP registration procedure for a local company
1. Initial Contact: Review of the documents uploaded by the OCFI where the requirements for the Management board and the company are set.
2. Prefiling communications with the OCFI: As the authorization to charter a VASP is still under the OCFI’s criteria, it is fundamental for any company to align its operations according to the limits of the Act 273.
3. Submitting the application: All the necessary documents must be presented before the OCFI, including certain compliance legal framework from the United States. Additionally, the company will submit its Business Plan and risk management plan.
4. Chartering decision: Divided by two stages with more or less 6 months of difference between each other.
- Authorization to constitute the company.
- Authorization to commence operations.
Authorization of VASP from another state to provide services in the jurisdiction
If the VASP is registered as that in the U.S. a new registration is not needed. Besides that, the same conditions and procedures for the local ones are applicable.
Requirements to the VASP after registration (corporate maintenance, reporting, substance)
Overall, VASPs are supervised by Puerto Rican regulatory authorities and, additionally, U.S. authorities when applicable (AML). In principle, each supervised entity must report its financial statements up to 90 days after the close of each financial year under penalty of cancellation of its operating license. Although, the OCFI may establish certain different criteria from the general rule.
Liability provided for the activities of a VASP without local registration
As a registration is needed to operate as a VASP in Puerto Rico, providing similar services may incur not only in administrative sanctions which effects can appear in the future; but criminal procedures on the basis of crimes against the safety and security of economic transactions, according to the Criminal Code of Puerto Rico. Crime prosecution and civil liabiity on federal level is highly possible as well.
Our contacts
If you want to become our client or partner, feel free to contact us at support@manimama.eu.
Or use our telegram @ManimamaBot and we will respond to your inquiry.
We also invite you to visit our website: https://manimama.eu/.
Join our Telegram to receive news in a convenient way: Manimama Legal Channel.
Manimama Law Firm provides a gateway for the companies operating as the virtual asset wallet and exchange providers allowing to enter to the markets legally. We are ready to offer an appropriate support in obtaining a license with lower founding and operating costs. We offer KYC/AML launch, support in risk assessment, legal services, legal opinions, advice on general data protection provisions, contracts and all necessary legal and business tools to start business of virtual asset service provider.
The content of this article is intended to provide a general guide to the subject matter, not to be considered as a legal consultation.
