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 Uruguay.
The law regulating the activities of VASPs
VASP regulator
The Central Bank of Uruguay (CBU) through the Superintendence of Financial Services (SSF)
Activities included in VASP services
In accordance with clause 6.2.2 of the Conceptual Framework:
- Buying and selling virtual assets
- Exchange between one or more forms of virtual assets
- Transfer of virtual assets
- Safekeeping and/or administration of virtual assets or instruments enabling control over virtual assets
- Participation in and provision of financial services related to an issuer’s offer and/or sale of a virtual asset
VASP registration procedure for a local company
According to clause 8.4.1, 8.4.2 of the Conceptual Framework:
Entities currently regulated by the CBU and duly registered must not apply for a new authorization for providing Virtual Assets services. However, they have the obligation to notify the start of these activities
Authorization of VASP from another state to provide services in the jurisdiction
According to clause 8.4.1, 8.4.2, 8.3 of the Conceptual Framework:
Entities that are not currently registered with the CBU and intend to regularly and professionally provide Virtual Asset Services, must apply for a VASP license
When a company is not incorporated and does not carry out activities in Uruguay, but has a client in Uruguay, it is probably considered that it is not carrying out activities in the country. At first, it would be considered that the business is not being conducted in the country, therefore it would be beyond the boundaries of national laws. However, it would require a case by case analysis.
Requirements to the VASP after registration (corporate maintenance, reporting, substance)
No information
Liability provided for the activities of a VASP without local registration
No information
Other important information
In the proposed draft law, the CBU defines virtual assets, explains the concept of a token and distributed ledger technology and explains the relationship between the terms “cryptoassets”, “virtual assets” and “cryptocurrency”
The draft law also classifies virtual assets as follows:
- Virtual Assets Securities. These VAs may be further regulated as uncertificated securities by Law No. 18627
- Virtual Utility Assets
- Stable Virtual Assets. Those VAs that are backed by fiat currency may be considered electronic money and regulated by Law No. 19210. According to this law, issuers of electronic money will first need to obtain authorization from the СBU
- Exchangeable Virtual Assets. These VAs should be subject to control and regulation by the CBU
In general, the draft law aims to introduce minimal changes to the existing legislation necessary to provide a legal framework for further development of the relevant regulation by the CBU. In particular, the CBU is empowered by to control VASP, according to the amendments to Law No. 16696
Taking into account all the changes, entities operating with virtual assets in Uruguay will be subject to AML/CFT control, regardless of whether they are part of the national financial system or not
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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.
