Argentina investigates fintech firms for unauthorized financial intermediation involving crypto

The Central Bank of the Argentine Republic (BCRA) is investigating nine fintech companies. The monetary authority wants to determine if the fintech firms have conducted unauthorized financial intermediation involving crypto.

According to Coindesk, the nine fintech companies convert deposits into cryptoassets such as cryptocurrencies. These crypto-assets are then used to finance investments or for consumer financing.

“The BCRA will carry out inspections of a fintech group,” the Central Bank said in an announcement. “The Central Bank of the Argentine Republic (BCRA) began the inspection of a group of fintech that is offered as a link to finance investment projects using crypto assets as a channel for savings, to determine if they are conducting unauthorized financial intermediation.”

The monetary authority has the power to request information from suspected entities. The Central Bank also has the power to order the stop the company’s activity and impose sanctions.

“The Financial Entities Law delegates to the Central Bank the power to request information when there is a suspicion that a person or company is carrying out financial intermediation tasks and, if applicable, order the immediate and definitive cessation of the activity and apply sanctions,” the Central Bank added.

.In its announcement, the BCRA did not specifically mention the names of the fintech firms being investigated. However, a spokesperson for the BCRA told CoinDesk that the central bank is now notifying the nine companies, which is expected to be completed by the end of next week.

The Central Bank intends to files charges against the erring firms if its investigations eventually reveal that there were unauthorized financial intermediations. “If the investigations determine indications of financial intermediation without authorization, the BCRA will make the corresponding criminal complaints under the terms of article 310 of the Penal Code,” the monetary authority explained.

Parties found guilty could face prison sentences of one to four years and fines of two to six times the value of the transactions. The court might also opt to disqualify firms from operating their businesses in Argentina for up to six years.

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