Centralized exchange in Cuba

Resolución No. 215/2021 del Banco Central de Cuba (BCC)

Resolución No. 216/2021 del Banco Central de Cuba (BCC)

Overview: This is the cornerstone regulation specifically for virtual assets. It establishes the rules for the use of certain virtual assets in commercial transactions, their licensing, and supervision in Cuba. It defines virtual assets and virtual asset service providers (VASPs). It explicitly states that the BCC will grant licenses to VASPs that operate in Cuba. It also emphasizes that operations with virtual assets must comply with AML/CFT rules.

Legalizes the use of virtual assets for financial transactions between individuals and legal entities, but only those authorized by the BCC.

Requires service providers dealing with virtual assets to obtain a license from the BCC.

Prohibits the use of virtual assets that are not authorized by the BCC.

Stresses compliance with AML/CFT regulations.

Identification and Verification:

Obtain and verify the identity of the customer and, where applicable, the beneficial owner. This includes:

For Individuals: Full legal name, date of birth, address, nationality, national identity number (e.g., ID card, passport), and occupation. Verification must be from reliable, independent sources (e.g., official documents).

For Legal Entities: Legal name, legal form, address of the registered office, names of directors/senior management, beneficial owners, and proof of existence (e.g., articles of incorporation, business registration certificate).

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

Ongoing Monitoring: Conduct ongoing monitoring of the business relationship and transactions undertaken by customers to ensure consistency with the VASP's knowledge of the customer, their business, and risk profile, including the source of funds.

Risk-Based Approach (RBA): Implement a risk-based approach, meaning that the intensity of CDD measures should be commensurate with the level of ML/TF risk identified.

Enhanced Due Diligence (EDD): Must be applied for higher-risk categories, such as:

Resolution 215/2021 regulates the use of virtual assets in Cuba. It defines virtual assets and states that their use for transactions between natural and legal persons is authorized by the BCC, provided they are issued by central banks or monetary authorities, or otherwise explicitly approved by the BCC. It also explicitly prohibits the use of virtual assets issued by private entities without prior authorization from the BCC. Entities operating with virtual assets must obtain a license from the BCC.

Resolution 216/2021 initially authorized financial institutions to use virtual assets under BCC supervision with prior authorization, but subsequent implementation has moved to a concrete licensed framework where only 10 state-owned and mixed-enterprise firms have been granted licenses, excluding regular banks and non-bank financial institutions, and accompanied by new restrictive conditions including unilateral account freezing powers.

Cuba does not have a distinct "crypto custodial license" in the sense of a specialized license solely for custody services.

However, Resolution 215/2021 mandates that any legal person (entity) operating with virtual assets (which would include providing custody-like services) must obtain prior authorization from the Banco Central de Cuba.

There are no explicit crypto-specific rules mandating the segregation of client virtual assets from the operating assets of the custodian or the personal assets of the entity in the Cuban regulations (Resolution 215/216).

There are no explicit crypto-specific rules mandating the segregation of client virtual assets from the operating assets of the custodian or the personal assets of the entity in the Cuban regulations (Resolution 215/216).

There are no explicit mandates or requirements for cold storage (offline storage of private keys) in the Cuban regulations.

No, not the specific FATF Travel Rule. Cuba's primary regulation, Resolution 215/2021 from the Banco Central de Cuba (BCC), focuses on authorizing, licensing, and supervising VASPs within Cuba and requiring them to implement general AML/CFT measures. It mandates a risk-based approach, customer due diligence, and reporting of suspicious transactions. However, it does not explicitly detail the requirement to collect and transmit originator and beneficiary information for all VA transfers above a certain threshold, which is the core of the Travel Rule.

Since the specific FATF Travel Rule is not explicitly adopted, there are no defined threshold amounts for the collection and transmission of originator and beneficiary information on VA transfers.

Resolution 215/2021 covers any legal entity operating in Cuba that intends to provide virtual asset services to the public or other entities. These services include, but are not limited to:

Transfer of virtual assets.

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

These entities must obtain a license from the Banco Central de Cuba to operate legally.

Lack of Transparency: The Cuban government is not known for its transparency regarding internal enforcement actions, especially against individuals or smaller, private entities.

Central Bank of Cuba (BCC) holds expanded enforcement powers, including unilateral authority to freeze bank accounts without notice and suspend Visa and Mastercard transactions.

Focus on Regulation: Cuba's primary public actions concerning crypto have been the creation of a legal framework to regulate virtual assets, aiming to harness them for economic benefit (e.g., bypassing US sanctions, facilitating remittances) while simultaneously controlling their use to prevent illicit activities and maintain state oversight.

Nature of the Economy: In a state-controlled economy, significant independent financial operations (like an unregistered crypto exchange) would likely be shut down or absorbed without a public trial or detailed announcement.