Today, September 25, the transitional period established by the Fintech Act for Financial Technology companies to request authorization to continue operations ends.
Given the importance of this date, there has been an increase in interest around the issue throughout the sector. Therefore, we would like to explain how recent regulatory developments would affect the operation of Bitso and its users, but first, we would like to give you a brief summary of some of the activities we have done in recent months.
Talking about operations with crypto currencies, since August we are regulated by the Financial Services Commission of Gibraltar (GFSC). This means that from that moment on, custody, as well as the sending, withdrawal and trading of crypto currencies, are regulated by the Distributed Ledger Technology Regulatory Framework license. If you are interested in knowing more about it, we invite you to read that entry in our blog.
Now, let’s talk about operations in Mexican pesos. Several months ago we officially submitted our application to the corresponding Mexican authorities to obtain authorization to operate as a Financial Technology Institution (FTI) under the Electronic Payment Funds Institution (EFPI) scheme. This means that when interacting with Mexican pesos, either through SPEI, cash deposits or Bitso Transfer, you will continue to use our services regulated by the Mexican Government.
The application to operate in a regulated manner in pesos is still in process and we are waiting for a response from the Mexican regulators. This does not change the way you operate on our platform and you will be able to continue enjoying the services we provide you in the way you have done until now, since our services related to cryptomonies are operated and regulated in Gibraltar.
Since the publication of the Fintech Act until today, there have been a couple of changes that are important for you to know about. One of the main ones concerns the relationship between cryptomoney and the prevention of money laundering.
- The secondary legislation that contemplated money laundering prevention issues for Financial Technology Institutions was published in September last year, this also included operations with crypto money. However, in March 2019 another provision was published (Banxico’s Circular 4/2019) which left the purchase and sale and custody of crypto money outside this regulation.
- Because of this, now the measures and procedures for prevention of money laundering, related to the use of crypto money, will be defined under the scheme of the Federal Law for the Prevention and Identification of Operations with Resources of Illicit Origin (also known as the “Anti-Money Laundering Law”).
- This means that companies and individuals offering custody, transfer, purchase or sale of cryptomoney services in Mexico, must submit notices to the Ministry of Finance and Public Credit through the Financial Intelligence Unit for amounts exceeding 645 UMAs (about $55,000 pesos). These measures also apply to activities such as donations, real estate development, marketing and distribution of vehicles, new or used, among others.
It is important to note that for the buying and selling of cryptosystems within Bitso, Gibraltar’s money laundering prevention legislation applies.
As always we want to be extremely transparent with our users, and not miss the opportunity to remind them that Bitso has always worked as a self-regulated platform and now regulated based on international standards and best practices that aim to provide security and certainty to your funds.
Now, by regulating our services of crypto-currency in Gibraltar, and pesos in Mexico as an Electronic Payment Fund Institution under the Fintech Act for the use of Mexican pesos, we are sure that we will achieve greater financial inclusion in Mexico and encourage innovation in financial services, through the use of new technologies, always giving a special focus on the security and benefits of our users.