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At Tracer Mexico, multiple visitors to our website have asked us about the Mexican legislation applicable to the operation with virtual assets (activos virtuales). Next, we are going to put a short text on the regulation of virtual assets in Mexico and the relationship of these activities with Financial Technology Institutions.
Operations with Virtual Assets
According to the current applicable legislation, in Mexico there is no license or express authorization for the operation with virtual assets. However, given the latest changes to the Federal Law for the Prevention and Identification of Operations with Resources of Illicit Origin (hereinafter, the “Law”), the recurrent offering of virtual assets is now considered as a vulnerable activity. We transcribe Article 17 of the law, for better reference:
- Article 17. For the purposes of this Law, Vulnerable Activities and, therefore, object of identification in terms of the following article, will be understood as those listed below: (…)
- XVI. The usual and professional offering of virtual asset exchange by subjects other than Financial Institutions, carried out through electronic, digital or similar platforms that manage or operate, facilitating or carrying out purchases or sales operations of said assets owned by its clients or provide means to guard, store, or transfer virtual assets other than those recognized by The Bank of Mexico in terms of the Law to Regulate Technological Financial Institutions. A virtual asset shall be understood to be any representation of value registered electronically and used by the public as a mean of payment for all types of legal acts and which transfer can only be carried out through electronic means. In no case will the legal currency in national territory, foreign currency or any other asset denominated in legal, national or foreign currency be understood as a virtual asset.
- They will be subject to notice before the Secretary when the amount of the purchase or sale operation carried out by each client of whoever carries out the vulnerable activity referred to in this fraction is for an amount equal to or greater than the equivalent of six hundred and forty-five Measure Units and Update.
- If The Bank de Mexico recognizes virtual assets in terms of the Law to Regulate Technological Financial Institutions, the people who provide the means referred to in this section must obtain the corresponding authorizations within the terms indicated by said Bank of Mexico in the corresponding provisions. (Situation that was not allowed by the Bank of Mexico according to the release that is related later).
- The acts or operations that are carried out for amounts lower than those indicated in the previous sections will not give rise to any obligations. However, if a person performs acts or operations for an accumulated sum in a period of six months that exceeds the amounts established in each case for the formulation of Notices, it may be considered as an operation subject to the obligation to present them for the purposes of this Law.
For this reason, the applicable regulations are those referred to in this Law. Within this legislation, it is indicated that they must comply with certain obligations for customer identification, registration with the registry of the Ministry of Finance and Public Credit, as well as certain notices to the referred Institution. Also, there was an important modification regarding the general rules of the aforementioned Law. Said modifications were effective on November 30, 2020, and it was agreed, among other things, that the vulnerable activity described in Article 17 section XVI, transcribed in the previous paragraph, must follow a different procedure for its registration. We transcribe the corresponding Articles for better visualization:
- Article 4.- For the purposes of articles 12 and 13 of the Regulation, those who carry out acts or operations in terms of article 17 of the Law, must enter the Portal on the Internet, in order to send, under oath, the following information for its registration as a Vulnerable Activity: (…)
- Article 10. Bis. Those who carry out the Vulnerable Activity in terms of section XVI of article 17 of the Law, prior to sending the information referred to in article 4 of these rules, must physically submit the following documentation: (…)
- Article 10 Quarter. Once the documentation referred to in article 10 Bis of these rules has been received, the SAT will inform the obligated subject in writing if it has received it in its entirety, in order to proceed with its registration as indicated in article 4 of these rules.
It is important to emphasize that this is not a license, nor should it be taken as such. Likewise, the approval of the Secretary is not required to start operating; it simply provides a regulatory framework for collecting information and preventing money laundering in operations with virtual assets.
Financial Technology Institutions
Regarding the Technological Financial Institutions regulated by the so-called Fintech Law, these Institutions are not authorized to offer virtual assets to the public since, being financial institutions, they are regulated by the Bank of Mexico; which through Release 4/2019 determined that no financial institution could provide said service, they can only use virtual assets for internal operations, not for offering to the public.
Also, this position was reinforced through Official Release number 039 dated June 28, 2021, which can be reviewed at the following link.
If you have doubts about the application of the Mexican legal provisions regarding Virtual Assets and Fintech Law, we suggest that you schedule a Legal Specialty Call with us.
In the doubts that you have, the first step is to determine if the regulation is applicable to your company; the second step is to determine exactly what you have to do to advance your operations in Mexico.
We can help you in Tracer Mexico with our expert team in Fintech and Virtual Assets.
Finally, please note that this Post does not represent in any way a legal opinion on our part; any opinion must be made based on the analysis of the specific case.