• Argentina is considering the inclusion of proof-of-solvency requirements in its upcoming cryptocurrency regulatory framework.
• The CNV, the national securities regulator, will be studying these requirements for exchanges and custody institutions in Argentina after the demise of leading crypto exchange FTX.
• These measures aim to prevent a similar situation from occurring again, with other exchanges such as Binance, Crypto.com and Kucoin taking precautionary steps to carry out proof-of-reserves procedures voluntarily.
Argentina Mulls Proof-of-Solvency Requirements
Argentina is considering the inclusion of stringent proof-of-solvency requirements in their next crypto regulatory framework. The CNV (national securities regulator) is studying these requirements for exchanges and custody institutions operating within Argentina’s borders. This comes after the collapse of leading cryptocurrency exchange FTX last year, leaving customers without access to their funds.
Proof of Solvency
A proof-of-solvency report registers whether an exchange or crypto company has the amount of cryptocurrency it claims to have, while looking directly at its funds in the blockchain, certifying that there are sufficient funds to cover liabilities presented to customers. This measure aims to prevent a similar situation from occurring again.
Precautionary Steps by Exchanges
In response to this potential regulation, other cryptocurrency exchanges such as Binance, Crypto.com and Kucoin have taken precautionary steps by initiating proof-of-reserves procedures voluntarily before any law requiring them passes through legislature.
CNV Working Group
The CNV president Sebastian Negri has declared that all measures will be taken in a joint effort with crypto companies in Argentina via a working group created for this purpose; which will include companies that meet asset and solvency requirements to support the risk they assume.
Conclusion
The Argentine government is preparing strict regulations for companies handling cryptocurrencies deposits for third parties with the aim of protecting consumer funds from being lost due to bankruptcy or mismanagement by exchanges or custody institutions operating within its borders .