Chile

**Regulator Name:** Fiscalía (Public Ministry/Prosecutor's Office)

**Entity Targeted:** Individuals associated with "Mind Capital" in Chile, notably promoters and recruiters of the scheme.

**Violation Type:** Alleged multi-level marketing scheme, fraud (estafa), swindling, and illegal banking activities, using cryptocurrencies as a facade.

For the relevant Chilean offense, Article 161-A of the Chilean Penal Code establishes a *fixed statutory penalty range*: imprisonment of reclusión menor in any of its degrees plus a fine of 50 to 500 UTM, increased to reclusión menor in its maximum degree plus a fine of 100 to 500 UTM if the same person both obtains and discloses the material; penalties are therefore not left open-ended to generic criminal charges, asset freezes, and restitution alone but are set by law within these ranges.

Investigations began around 2020-2021, with arrests and legal actions continuing from 2022 through at least January 2025.

**Outcome:** Criminal proceedings are ongoing against several individuals involved in promoting and operating the scheme within Chile. The goal is to prosecute those responsible and recover funds for victims.

**CriptoNoticias (Spanish):** "Mind Capital, Kuailian y ARBIM: tres estafas cripto investigadas por la justicia chilena" (February 2022) - While focused on multiple cases, it details the ongoing investigation into Mind Capital.

**Diario Financiero (Spanish):** "Criptoestafas: Fiscalía formaliza a 10 personas por caso Generación Zoe, IM Forex y Mind Capital" (October 2022) - Details formalization of charges.

**Entity Targeted:** Chilean individuals and entities linked to the international "Generación Zoe" and "IM Forex" schemes.

**Violation Type:** Alleged pyramid scheme, fraud (estafa), swindling, and illegal financial operations, misleading investors with promises of high, guaranteed returns using crypto as an investment vehicle.

**Penalty Amount:** Criminal charges have been filed, leading to arrests and asset seizures. Specific penalties (prison sentences, restitution) are pending final judicial decisions.

**Date:** Investigations and arrests primarily occurred from mid-2022 onwards, with legal proceedings ongoing.

**Outcome:** Several individuals have been arrested and charged in Chile for their roles in promoting and operating the scheme. The primary operator of Generación Zoe, Leonardo Cositorto, was arrested in Argentina and is facing charges there. Chilean authorities continue to investigate and prosecute local affiliates.

**La Tercera - Pulso (Spanish):** "Las claves del caso Generación Zoe, la presunta estafa piramidal internacional que impacta a Chile" (April 2022) - Provides context on the scheme and its reach into Chile.

**Regulator Name:** CMF (Comisión para el Mercado Financiero)

**Entity Targeted:** General public, and implicitly, unregulated entities operating in the crypto space. Specific warnings target individual unregistered platforms.

Chile's regulatory framework under Resolution 79/2025 imposes strict oversight and reporting obligations on digital marketplaces and payment facilitators, with punitive enforcement measures (e.g., anti-avoidance rules) to combat non-compliance, tax evasion, and fraud—not merely preventative warnings.

**Penalty Amount:** No direct penalties attached to a warning. Penalties would come from future enforcement actions under the new FinTech Law, once fully implemented.

**Date:** CMF has issued multiple warnings against unregistered entities and potential scams throughout the last 3 years. The FinTech Law was published in January 2023.

**Outcome:** Increased public awareness about crypto risks. The FinTech Law now requires Virtual Asset Service Providers (VASPs) to register with the CMF and comply with various regulations (e.g., AML/CFT, consumer protection). This will enable direct regulatory enforcement actions in the future against non-compliant entities.

The CMF has issued multiple specific updated alerts in 2026 naming particular unregulated entities and platforms, indicating dynamic enforcement rather than static general warnings.

**CMF Official Press Release (Spanish):** "CMF advierte sobre entidades no reguladas que ofrecen productos o servicios financieros" (Ongoing, examples from various dates) - General warnings.

Example warning from July 2023: https://www.cmfchile.cl/portal/prensa/605/w3-article-122359.html (Search "CMF advierte" for more recent ones).

**Deloitte Article:** "Chile publishes its new Fintech Law: key takeaways" (January 2023) - English summary of the law.

**Ley N° 21.521 (Fintech Law):**

**Title:** Marco para la modernización de la legislación financiera

*Note: This is the primary law. The CMF is currently developing the specific secondary regulations (normativa secundaria) that will detail the requirements for VASPs.*

**Comisión para el Mercado Financiero (CMF):**

The CMF has already published its specific regulations regarding VASPs under the Fintech Law, which is now in effect.

**Unidad de Análisis Financiero (UIF):**

**Ley N° 19.913 (creates UIF and defines its powers):** https://www.bcn.cl/leychile/navegar?idNorma=213508

**UIF Circulars/Instructions:** VASPs should consult the UIF's official instructions, particularly those relating to reporting entities and AML/CTF obligations. For example, Circular N° 57 is highly relevant for defining reporting entities and their obligations.

**Comisión para el Mercado Financiero (CMF)** - Financial Market Commission:

**Role:** The CMF is the primary financial regulator responsible for supervising financial institutions, securities markets, and now, significantly, Virtual Asset Service Providers (VASPs). With the Fintech Law, the CMF is tasked with establishing the specific regulatory framework for VASPs, including registration, licensing, operational requirements, risk management, and consumer protection. It also oversees prevention of market abuse.

**Banco Central de Chile (Central Bank of Chile)**:

**Role:** The Central Bank is primarily responsible for monetary policy, financial stability, and the regulation of payment systems. While it does not directly regulate crypto assets as securities, it monitors their impact on financial stability, payment systems, and the monetary system. It has also explored the potential for a Central Bank Digital Currency (CBDC).

**Unidad de Análisis Financiero (UAF)** - Financial Analysis Unit:

**Role:** The UAF is Chile's financial intelligence unit, responsible for preventing and detecting money laundering and terrorist financing (AML/CFT). Entities dealing with virtual assets, even before the Fintech Law, were expected to comply with general AML/CFT regulations, and the Fintech Law explicitly reinforces this for VASPs under CMF oversight.

**Ley N° 21.521, known as the "Fintech Law" (Ley Fintech)**

**Date:** Published in the Official Gazette on **January 17, 2023**.

**Significance:** This is the cornerstone of Chile's current regulatory framework for virtual assets. It explicitly includes "virtual asset service providers" (proveedores de servicios de activos virtuales) within the scope of CMF regulation. It defines virtual assets and services (such as custody, exchange, and intermediation) and mandates that VASPs must register with the CMF and adhere to its regulatory requirements, including capital, operational, risk management, and consumer protection standards. The law also establishes sandboxes for financial innovation.

**URL (Official Gazette):** https://www.diariooficial.interior.gob.cl/publicaciones/2023/01/17/22421/01/22421.pdf (See Title IV "De los Prestadores de Servicios de Activos Virtuales")

**Ley N° 19.913 (Law on Money Laundering and Terrorist Financing)** and its subsequent modifications:

**Date:** Originally published **December 23, 2003**, with various amendments.

**Significance:** This law, enforced by the UAF, establishes the general AML/CFT framework in Chile. Even prior to the Fintech Law, entities dealing with virtual assets were generally considered "reporting entities" if their activities fell within the scope of financial services covered by this law, requiring them to report suspicious transactions. The Fintech Law reinforces the application of these rules to VASPs.

**URL (Consolidated Text via BCN):** https://www.bcn.cl/leychile/navegar?idNorma=220261

**Secondary Regulations (in development):** The Fintech Law mandates the CMF to issue specific regulations and circulars to detail how VASPs must operate, including licensing procedures, prudential requirements, and conduct standards. These regulations are crucial for the full implementation of the law and are expected to be published over time.

**Legality:** Crypto trading and the operation of crypto exchanges (now classified as VASPs) are **not banned** in Chile.

**Regulation under Fintech Law:** With the enactment of **Ley N° 21.521 (Fintech Law)**, entities providing virtual asset services (including exchanges, brokers, custodians, and certain forms of issuance) are explicitly brought under the regulatory oversight of the **CMF**.

**Registration/Licensing:** VASPs must register with the CMF and comply with its regulatory framework, which will include specific licensing requirements once the secondary regulations are fully developed.

**AML/CFT Compliance:** Exchanges are subject to strict Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) rules as supervised by the UAF and enforced by the CMF. This includes Know Your Customer (KYC) procedures, transaction monitoring, and suspicious activity reporting.

**Prudential Standards:** The CMF will impose requirements related to capital adequacy, operational risk management, cybersecurity, and consumer protection.

**Market Conduct:** Rules preventing market manipulation and ensuring fair practices will also apply.

**Ley N° 19.913, que Crea la Unidad de Análisis Financiero y Modifica Diversas Disposiciones en Materia de Lavado y Blanqueo de Activos (Law N° 19.913, which Creates the Financial Analysis Unit and Modifies Various Provisions Regarding Asset Laundering and Blanqueo de Activos):** This is the main AML/CFT law in Chile, establishing the UAF and defining the framework for preventing and prosecuting money laundering and terrorist financing.

**UAF Circular N° 57 (Circular N°57 de la UAF):** This is the most crucial piece of regulation for VASPs. Issued by the UAF, Circular N° 57 (published in October 2020) explicitly designates "Providers of Virtual Asset Services" (PSAV) as obligated entities under Law N° 19.913. This means VASPs must comply with all AML/CFT obligations applicable to other financial institutions.

**Circular N° 49 de la UAF:** Establishes general instructions on risk management and prevention of ML/FT for obligated entities, including policies, procedures, internal controls, and designated compliance officers.

**Circular N° 50 de la UAF:** Provides instructions for identifying Politically Exposed Persons (PEPs).

**Circular N° 51 de la UAF:** Establishes instructions regarding the detection and reporting of transactions related to terrorism financing and compliance with international sanctions lists.

**Circular N° 52 de la UAF:** Details instructions for conducting risk assessments for ML/FT.

**Circular N° 58 de la UAF:** Modifies and updates the instructions for reporting suspicious activities (ROS) and other information to the UAF.

**Exchange** between virtual assets and fiat currencies.

**Exchange** between one or more forms of virtual assets.

**Custody and/or administration** of virtual assets or instruments enabling control over virtual assets.

**Participation and provision of financial services related to an issuer's offer and/or sale of a virtual asset.**

**Individuals:** Obtain and verify identity (e.g., full name, ID number, date of birth, nationality, address, contact information) using reliable, independent source documents, data, or information.

**Legal Entities:** Obtain and verify legal form, name, address, contact information, legal representative(s), and information on beneficial ownership.

**Beneficial Ownership:** Identify and verify the natural person(s) who ultimately own or control the customer, or the natural person(s) on whose behalf a transaction is being conducted.

**Purpose and Nature of Business Relationship:** Understand the purpose and intended nature of the business relationship or transaction.

**Ongoing Monitoring:** Continuously monitor the business relationship and transactions to ensure they are consistent with the VASP's knowledge of the customer, their business, and risk profile, including the source of funds.

**Politically Exposed Persons (PEPs):** Implement enhanced due diligence (EDD) measures for PEPs, including obtaining senior management approval for establishing business relationships and taking reasonable measures to establish the source of wealth and source of funds.

**Risk-Based Approach:** Apply CDD measures according to the level of risk associated with the customer, product, service, or geographic area. Higher risk scenarios require Enhanced Due Diligence (EDD).

**Source of Funds/Wealth:** For high-risk customers or transactions, VASPs must take reasonable measures to establish the source of funds and, where appropriate, the source of wealth.

**Obligation to Report:** VASPs are required to report any operation, transaction, business, or activity that they identify as unusual or suspicious, as well as any attempts to carry out such activities, regardless of the amount.

**What Constitutes Suspicion:** Suspicion arises when a VASP's analysis, based on internal policies and the UAF's guidelines (e.g., red flags indicators), leads them to believe that funds may be linked to money laundering, terrorism financing, or other predicate offenses.

**Reporting Mechanism:** Reports must be made through the UAF's official online platform, following the instructions provided in UAF Circular N° 58.

**No Tipping-Off:** VASPs and their employees are prohibited from disclosing to the customer or third parties that a suspicious transaction report has been or will be filed.

**Retention Period:** All records related to customer identification, account files, business correspondence, and transaction data (including information on the origin and destination of funds/virtual assets) must be retained for a minimum of **five (5) years** from the date the business relationship ends or the transaction is executed.

**Types of Records:** This includes, but is not limited to:

CDD documentation (identity documents, beneficial ownership information).

Chile is implementing the Travel Rule, requiring cryptocurrency platforms to identify the sender and recipient of transactions, which implies recording of participants, amounts, and wallet addresses, but the regime is partial and evolving, not a blanket mandate for all virtual asset transactions.

Analysis and reasoning behind any decisions made regarding customer risk profiles.

Copies of all internal reports, STRs, and communications with the UAF.

Evidence of AML/CFT training provided to employees.

**Designated Compliance Officer:** Appoint a high-level compliance officer responsible for the AML/CFT program, reporting directly to senior management.

**Internal Policies and Procedures:** Develop and implement internal policies, procedures, and controls to prevent and detect ML/FT, tailored to the VASP's specific risks.

**Risk Assessment:** Conduct regular ML/FT risk assessments of their customers, products, services, transactions, and delivery channels.

**Employee Training:** Provide ongoing AML/CFT training to all relevant employees, ensuring they are aware of their obligations and how to identify and report suspicious activities.

**Internal Audit:** Establish an independent audit function to periodically review and assess the effectiveness of the AML/CFT program.

**Sanctions Screening:** Implement procedures to screen customers and transactions against national and international sanctions lists (e.g., UN, OFAC).

Chile's Financial Market Commission (CMF) issued binding regulations on July 3, 2024, implementing the Open Finance System under Ley N° 21.521, which supersedes or modifies the original Title II, Articles 4-22 framework.

Any entity intending to provide virtual asset custody services in Chile must register with the Financial Market Commission (CMF) via the Financial Services Register, as established by the Fintech Law.

**Authorization and Registration:** Providers of virtual asset services, including custody, must obtain authorization and be registered with the CMF.

Chile is actively overhauling corporate governance at major state-owned firms to address current weaknesses, rather than robust structures being firmly required and in place.

**Risk Management:** Implement comprehensive risk management policies, including operational, technological, and cybersecurity risks.

**Capital Requirements:** Meet minimum capital requirements, which will be specified in the CMF's secondary regulations.

**Operational Requirements:** Adhere to operational standards ensuring the security and integrity of services.

**Technology and Cybersecurity:** Implement strong cybersecurity measures and IT infrastructure to protect client assets and data.

**Anti-Money Laundering (AML) / Counter-Terrorist Financing (CTF):** Comply with existing AML/CTF regulations, aligned with FATF recommendations, which are enforced by the Financial Analysis Unit (UAF) in Chile.

Ley N° 21.521: https://www.bcn.cl/leychile/navegar?idNorma=1189025 (Official source: Biblioteca del Congreso Nacional de Chile)

CMF Fintech Law Information: https://www.cmfchile.cl/portal/principal/605/w3-propertyvalue-8594.html

Ley N° 21.521, Article 16 (General principles), with secondary regulations now issued and enforced by the CMF as of 2023.

**Requirements:** The Ley Fintech explicitly mandates the segregation of client assets from the VASP's own assets.

**Prohibition of Commingling:** Entities providing custody services for virtual assets are prohibited from mixing client assets with their own proprietary assets.

**Identification:** Client assets must be clearly identified as belonging to clients and separated from the VASP's balance sheet.

**Protection in Insolvency:** This segregation aims to protect client assets in case of the VASP's insolvency or bankruptcy.

**Specifics:** The detailed operational rules for segregation will be further developed in the CMF's secondary regulations.

Ley N° 21.521, Article 19: https://www.bcn.cl/leychile/navegar?idNorma=1189025

**Regulation:** Ley N° 21.521, Article 18.

**Requirements:** While the Ley Fintech does not explicitly mandate "insurance" in the traditional sense for all services, it does establish requirements for **guarantees and own capital** for regulated entities.

**Capital and Guarantees:** Regulated entities, including VASPs offering custody, must maintain adequate own capital and provide guarantees to back their operations and cover potential liabilities. These requirements are intended to protect clients and ensure the stability of the service provider.

**Risk Mitigation:** The amount and type of capital and guarantees will be determined by the CMF through secondary regulations, taking into account the specific risks associated with each service, including the custody of virtual assets.

Ley N° 21.521, Article 18: https://www.bcn.cl/leychile/navegar?idNorma=1189025

**Regulation:** Ley N° 21.521, Article 16 (General principles), and anticipated secondary regulations.

**Requirements:** The Ley Fintech does not explicitly mandate "cold storage" as a specific technical requirement in the primary law. However, it establishes a strong emphasis on **cybersecurity, operational security, and robust risk management**.

**Cybersecurity and IT Infrastructure:** VASPs are required to implement adequate cybersecurity policies, procedures, and IT infrastructure to ensure the integrity, confidentiality, and availability of information and the security of client assets.

**Risk Management:** Comprehensive risk management frameworks must address all relevant risks, including those related to the storage and security of virtual assets.

**Expected in Secondary Regulations:** It is highly anticipated that the CMF's secondary technical norms will include detailed requirements regarding the secure storage of virtual assets, which would implicitly or explicitly lead to the adoption of best practices like cold storage for a significant portion of assets, multi-signature wallets, hardware security modules (HSMs), and robust key management practices.

Ley N° 21.521, Article 16: https://www.bcn.cl/leychile/navegar?idNorma=1189025

**Regulation:** Ley N° 21.521, Article 3 (Definitions) and Article 4 (Regulated Entities).

**Definition:** The Ley Fintech defines **"Activo Virtual" (Virtual Asset)** as "any digital representation of value or rights that can be digitally transferred, stored, or traded, and used for payment or investment purposes, excluding fiat currency, securities, and other financial instruments already regulated by the CMF."

It defines **"Proveedor de Servicios sobre Activos Virtuales" (Virtual Asset Service Provider - VASP)** as any natural or legal person that, in the course of business, performs one or more of the following activities for or on behalf of another natural or legal person: exchange between virtual assets and fiat currencies, exchange between one or more forms of virtual assets, transfer of virtual assets, **custody and/or administration of virtual assets or instruments enabling control over virtual assets**, and participation in and provision of financial services related to an issuer's offer and/or sale of a virtual asset.

**"Qualified Custodian"**: In the Chilean context, a "qualified custodian" for digital assets would be an entity that has obtained authorization and is registered with the CMF as a VASP providing custody services, and that complies with all the requirements established by the Ley Fintech and its forthcoming secondary regulations.

Ley N° 21.521, Articles 3 and 4: https://www.bcn.cl/leychile/navegar?idNorma=1189025

**Current Status:** The Ley Fintech (N° 21.521) is already enacted and in force. This is the foundational law for crypto custody regulation.

**Pending Regulations:** The primary pending "legislation" (in the sense of detailed rules) are the **secondary regulations (reglamentos, normas de carácter general)** that the CMF is actively developing and issuing to implement the Ley Fintech. These regulations will provide the specific operational, technical, and prudential requirements, including those for virtual asset custody.

The CMF has been conducting public consultations on various aspects of the Ley Fintech. For example, in late 2023 and early 2024, it has been working on regulations for open finance, payment interfaces, and the general framework for financial innovation. Specific norms for VASPs and virtual asset custody are part of this ongoing process.

**Impact:** These secondary regulations will detail aspects such as precise capital adequacy, cybersecurity standards (which will likely address secure storage practices), outsourcing rules, governance, and specific reporting requirements for VASPs.

**Monitoring Progress:** Stakeholders interested in the detailed custody requirements should closely monitor the CMF's official website for updates on these regulations and public consultation processes.

CMF Fintech Law Information (will be updated with new regulations): https://www.cmfchile.cl/portal/principal/605/w3-propertyvalue-8594.html