Dominican Republic

**Ley No. 155-17 contra el Lavado de Activos y el Financiamiento del Terrorismo (Law No. 155-17 Against Money Laundering and Terrorism Financing)**, enacted in June 2017.

This law defines "obligated parties" (sujetos obligados) which include a broad range of financial and non-financial businesses and professions. While it doesn't explicitly name "virtual asset service providers," entities dealing with virtual assets in a professional capacity (e.g., exchanges, custodians, transfer services) are likely to be interpreted as falling under its scope due to the nature of the financial services they provide or facilitate.

**URL (Ley 155-17):** While an official government portal for laws might change, a reliable legal database link often used is: https://www.uaf.gob.do/media/2126/ley-155-17.pdf (This is a direct PDF link from the UAF website).

**Resolución R-BC-004-2022 de la Junta Monetaria (Monetary Board Resolution R-BC-004-2022):** This resolution, while not a VASP specific regulation, is crucial context. It forbids financial entities regulated by the Superintendencia de Bancos (SIB) from engaging with virtual assets, cryptocurrencies, or crypto assets. This means traditional banks cannot offer VASP services.

**Individuals:** Obtaining and verifying identity (name, date of birth, address, nationality, official identification number/document like passport or cédula).

**Legal Entities:** Obtaining and verifying legal name, address, articles of incorporation, legal form, proof of existence, powers of attorney, and the identity of beneficial owners and directors.

**Beneficial Ownership:** Identifying and verifying the identity of the ultimate natural person(s) who own or control the customer, or the person on whose behalf a transaction is being conducted.

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

**Risk-Based Approach:** Applying a risk-based approach to CDD. This means:

**Simplified Due Diligence (SDD):** Permitted for low-risk customers or transactions.

**Enhanced Due Diligence (EDD):** Required for high-risk customers, such as Politically Exposed Persons (PEPs), customers from high-risk jurisdictions, or complex and unusual transactions.

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

**FATF Travel Rule Expectation:** As the DR is a member of GAFILAT (the FATF-style regional body), VASPs are expected to eventually comply with the FATF's "Travel Rule," which requires VASPs to obtain and transmit originator and beneficiary information for virtual asset transfers above a certain threshold. While not explicitly codified in DR law for VASPs yet, it's a global standard.

**Identify Suspicious Activity:** Establish internal policies and procedures to detect and identify unusual or suspicious transactions.

**Report to FIU:** Report any transaction or attempted transaction suspected of being related to money laundering or terrorism financing to the **Unidad de Análisis Financiero (UAF)**, the Dominican Republic's Financial Intelligence Unit.

**No Tipping-Off:** Prohibit informing the customer or any third party that a STR has been filed (no "tipping-off").

**Designated Compliance Officer:** Appoint a compliance officer responsible for AML/CFT matters, including STR filings.

**Customer Identification Data:** All documents and information obtained during the CDD process.

**Transaction Records:** Details of all transactions, including amounts, dates, types, and parties involved.

**Analysis of Complex/Unusual Transactions:** Records of the analysis performed on complex, unusual, large, or suspicious transactions.

**Internal Reports:** Records of internal suspicious activity reports and their disposition.

**Retention Period:** Records must be retained for a minimum period of **five (5) years** after the termination of the business relationship or the date of the transaction.

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

The UAF is the Dominican Republic's Financial Intelligence Unit (FIU). It is the primary authority responsible for receiving, analyzing, and disseminating suspicious transaction reports (STRs) and other financial intelligence related to money laundering and terrorism financing.

It plays a key role in the supervision of AML/CFT compliance for all "obligated parties," especially those not under the direct prudential supervision of a specific financial regulator (like the SIB).

**Superintendencia de Bancos (SIB) - Superintendency of Banks:**

The SIB supervises and regulates financial entities within the traditional banking system.

**Junta Monetaria (Monetary Board) and Banco Central de la República Dominicana (Central Bank):**

These bodies are responsible for monetary and financial policy and macro-prudential regulation. They issue resolutions and regulations that impact the financial system, including the stance on virtual assets. They are actively studying the matter for future regulatory development.

**URL (Junta Monetaria):** Resolutions are typically found on the Central Bank website or a dedicated section.

**An Investment of Money (or assets):** A person provides value (fiat, other crypto, etc.) to acquire the token.

**In a Common Enterprise:** The funds are pooled and contribute to a shared project or venture.

**With an Expectation of Profit:** The purchaser anticipates financial gain from the token.

**Derived Primarily from the Efforts of Others:** The profits are expected to come from the managerial or entrepreneurial efforts of the issuer or a third party, rather than the purchaser's own efforts.

**Ley del Mercado de Valores No. 249-17:** Defines "valores" (securities) broadly as "cualquier título valor o instrumento financiero que otorgue derechos patrimoniales, de participación o de crédito" (any security title or financial instrument that grants property, participation, or credit rights). It also defines "oferta pública" as any invitation to acquire or dispose of securities.

**Banco Central de la República Dominicana (BCRD) Resolutions/Notices:** While not directly classifying tokens as securities, the BCRD has consistently issued warnings emphasizing that cryptocurrencies are **not legal tender** in the DR, are not regulated by the monetary and financial authorities, and entail significant risks.

**Security Tokens:** These are digital assets explicitly designed to represent traditional securities, such as:

**Equity tokens:** Representing ownership stakes in a company, granting voting rights or dividends.

**Debt tokens:** Representing a loan made to an issuer, with an expectation of interest payments.

**Asset-backed tokens:** Representing ownership of fractional shares in real-world assets (real estate, art, commodities) or a claim on future revenues/profits.

**Investment-contract tokens:** Any token issued with the primary purpose of raising capital from investors who expect profits from the efforts of others.

**Utility Tokens (Under Certain Circumstances):** While intended to provide access to a product or service, utility tokens can be reclassified as securities if:

They are sold to a broad public with an explicit or implicit promise of future appreciation (i.e., people are buying them to speculate on their value increase, not primarily for immediate use of the underlying service).

The project or service is not yet functional or fully developed at the time of the offering, making the purchase inherently speculative and dependent on the issuer's future efforts.

The marketing emphasizes investment returns rather than utility.

**Stablecoins:** Generally, stablecoins might not be classified as securities if they function purely as a medium of exchange pegged to a stable asset (like fiat currency) and do not promise an investment return. However, if a stablecoin's issuance involves features that suggest an investment contract (e.g., offering interest on holdings, or representing a share in the underlying reserve's profits), it could attract SIMV scrutiny.

**Payment/Currency Tokens (e.g., Bitcoin, Ethereum):** Tokens like Bitcoin or Ethereum, when used purely as a medium of exchange or store of value, are generally not considered securities. However, if an issuer or promoter packages these tokens as part of an investment scheme (e.g., promising high returns on pooled Bitcoin investments managed by them), the *scheme itself* could be deemed an unregistered securities offering.

**Registration:** Issuers conducting a "public offering" (oferta pública) of security tokens must:

**Register the securities with the SIMV.** This involves providing detailed information about the issuer, the token, the project, financial statements, risk factors, and the offering terms.

**Submit a prospectus (prospecto de oferta pública)** that has been approved by the SIMV. This prospectus must contain all material information necessary for investors to make informed decisions.

**Comply with ongoing disclosure requirements** (e.g., periodic financial reporting, material event disclosures) as long as the securities are publicly traded.

**Exemptions:** Law No. 249-17 provides for certain exemptions from registration, similar to private placement exemptions in other jurisdictions. These typically include:

**Private placements:** Offerings made to a limited number of sophisticated or institutional investors.

**Small offerings:** Offerings below a certain monetary threshold.

These exemptions are usually subject to strict conditions regarding the number of investors, advertising restrictions, and investor qualifications. Token issuers would need to ensure full compliance with these specific exemption criteria.

**Authorized Trading Platforms:** Any exchange or platform facilitating the trading of security tokens would need to be authorized and regulated by the SIMV as an exchange (bolsa de valores) or an electronic trading system.

**Broker-Dealers:** Intermediaries facilitating the buying and selling of security tokens would need to be registered and licensed by the SIMV as broker-dealers (puestos de bolsa).

**Market Manipulation:** Trading activities in security tokens would be subject to rules prohibiting market manipulation, insider trading, and other illicit practices, with the SIMV having enforcement powers.

**Cease-and-Desist Orders:** Requiring issuers to halt illegal offerings.

**Fines and Penalties:** Imposing monetary penalties on issuers and individuals involved.

**Disgorgement:** Ordering the return of ill-gotten gains to investors.

**Public Warnings and Investor Alerts:** Issuing advisories to the public about fraudulent or unregulated offerings.

**Referral for Criminal Prosecution:** In cases of severe fraud or egregious violations, the SIMV could refer matters to the Public Ministry for criminal charges.

**Banco Central de la República Dominicana (BCRD):**

BCRD Communications (search for "criptomonedas")

**Superintendencia del Mercado de Valores (SIMV):**

SIMV Ley del Mercado de Valores No. 249-17

While the SIMV hasn't issued explicit crypto-specific guidance similar to the SEC's "Framework for 'Investment Contract' Analysis of Digital Assets," its general guidance and enforcement powers under Law 249-17 would be applied to digital assets if they fit the definition of a security. Their website's "Normativas" (Regulations) section would be the place to look for any future specific guidance.

**Banco Central de la República Dominicana (BCRD - Central Bank of the Dominican Republic):**

**Role:** The primary authority dictating the stance on virtual assets for the financial system. It has issued official communiqués asserting that cryptocurrencies are not legal tender and prohibiting financial institutions under its supervision from engaging with them.

**URL:** Banco Central de la República Dominicana

**Superintendencia de Bancos (SB - Superintendency of Banks):**

**Role:** Supervises the financial institutions (banks, credit unions, etc.) regulated by the Central Bank. It implements and enforces the Central Bank's directives regarding virtual assets within the banking sector.

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

**Role:** Responsible for combating money laundering and terrorist financing. While not directly regulating crypto, it would be involved in investigating suspicious transactions involving virtual assets under the existing AML/CFT framework, especially concerning the illicit use of funds.

**URL:** Unidad de Análisis Financiero (UAF)

**Comunicado Oficial del Banco Central de la República Dominicana (25 de junio de 2021):**

**Description:** This is the most significant official statement. It explicitly states that:

Cryptocurrencies (like Bitcoin) are **not legal tender** in the Dominican Republic.

They are **not backed** by the BCRD or any public entity.

Entities supervised by the BCRD (banks, credit unions, etc.) are **prohibited from storing, investing in, intermediating, or managing operations involving cryptocurrencies or virtual assets.** This effectively cuts off crypto exchanges and users from traditional banking services if those services are directly related to crypto.

It warns the public about the high risks (volatility, lack of regulation, potential for fraud, cyberattacks) associated with virtual assets.

**URL:** Comunicado Oficial del BCRD sobre Criptoactivos

**Ley No. 155-17 contra el Lavado de Activos y Financiamiento del Terrorismo (Law No. 155-17 against Money Laundering and Terrorist Financing):**

**Description:** While this law (from 2017) does not specifically mention "virtual assets" or "cryptocurrencies," its broad definitions of "assets" and "financial activities" mean that transactions involving crypto, especially if deemed suspicious or linked to illicit activities, could fall under its scope. The UAF would apply this law. This law aligns with FATF recommendations for combating financial crimes, which increasingly include virtual assets.

**URL:** Ley No. 155-17 (Official Gazette link often varies, but here's a common legal portal link)

**For Individuals:** It is **not explicitly illegal** for individuals to buy, sell, or hold cryptocurrencies. However, they do so at their own risk, with the explicit warnings from the Central Bank about volatility, fraud, and lack of protection.

**For Regulated Financial Institutions:** They are **prohibited** from engaging in any activities involving virtual assets. This means banks cannot facilitate transfers to/from crypto exchanges, open accounts for crypto businesses if their primary purpose is crypto dealing, or offer crypto services.

There is **no specific licensing or regulatory framework** for crypto exchanges operating within the Dominican Republic.

They operate in a **regulatory grey area**.

The Central Bank's prohibition on regulated financial institutions dealing with crypto significantly hinders their ability to access traditional banking services, making it challenging for them to operate legally and integrate into the financial system.

Any local exchange would likely need to comply with general business regulations and potentially the AML/CFT requirements of Ley 155-17, but without specific guidance for crypto, this remains ambiguous.

As a result, most crypto trading by Dominicans likely occurs through international platforms.

**UN Security Council Resolutions (UNSC Resolutions):**

The Dominican Republic is a member of the United Nations and, as such, is obligated to implement sanctions resolutions adopted by the UNSC. These resolutions target individuals, entities, and countries involved in terrorism, proliferation of weapons of mass destruction, and other threats to international peace and security.

**Compliance Requirement:** Dominican entities, including VASPs, must freeze assets and prevent transactions with individuals and entities appearing on the **UN Security Council Consolidated List**.

**Legal Basis:** This obligation is typically incorporated into national law, such as the Dominican Republic's AML/CFT framework.

**U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) Sanctions:**

OFAC sanctions have significant extra-territorial reach. While primarily targeting U.S. persons (citizens, residents, entities, and their foreign branches), non-U.S. entities can also face severe penalties if their activities involve:

U.S. financial systems (e.g., correspondent banking, dollar-denominated transactions).

U.S.-origin goods, technology, or services.

Facilitating transactions for sanctioned persons or entities.

Operating in industries or regions targeted by primary sanctions (e.g., Cuba, Iran, North Korea, Syria, Venezuela, Crimea region of Ukraine).

**Crypto-Specific OFAC Sanctions:** OFAC has explicitly sanctioned cryptocurrency mixers (e.g., Tornado Cash, Blender.io), exchanges (e.g., Garantex, Suex, Chatex), and wallets/entities associated with ransomware groups (e.g., Lazarus Group, Conti, Hive).

**Compliance Requirement:** VASPs in the DR engaging with the U.S. financial system or dealing with U.S. persons, or facilitating transactions that touch sanctioned entities/jurisdictions, must screen against OFAC's **Specially Designated Nationals and Blocked Persons (SDN) List** and other sanctions lists (e.g., the Sectoral Sanctions Identifications List).

**Legal Basis:** Relevant U.S. statutes and Executive Orders.

EU sanctions apply to all EU persons and entities, regardless of where they operate, and to non-EU entities conducting business within the EU. While their direct extra-territorial impact on a purely DR-based VASP is less pronounced than OFAC's, any VASP with an EU nexus (e.g., serving EU customers, having EU beneficial owners, or using EU-based services) must comply.

**Compliance Requirement:** Screening against the **EU Consolidated List of Persons, Groups and Entities Subject to EU Financial Sanctions**.

**Legal Basis:** Various EU Regulations and Council Decisions.

**Law No. 155-17 against Money Laundering and the Financing of Terrorism (Ley No. 155-17 contra el Lavado de Activos y el Financiamiento del Terrorismo) dated June 1, 2017.**

**URL:** Ley No. 155-17 (Official PDF from UAF)

**Unidad de Análisis Financiero (UAF - Financial Analysis Unit):** The national FIU responsible for receiving, analyzing, and disseminating suspicious activity reports (SARs) and for overseeing AML/CFT compliance. The UAF is also responsible for maintaining and circulating lists of individuals and entities subject to UN sanctions.

**Banco Central de la República Dominicana (BCRD - Central Bank of the Dominican Republic):** Has issued warnings about the risks of cryptocurrencies, stating they are not legal tender and are not regulated by the BCRD. While not directly regulating VASPs, it influences the financial system's approach.

**BCRD Statement (e.g., on risks):** https://www.bancentral.gov.do/a/d/4014-bancocentral-advierte-sobre-riesgos-e-implicaciones-uso-de-criptomonedas (Example warning)

**Superintendencia de Bancos (SIB - Superintendency of Banks):** Supervises entities within the formal banking system.

**Global Lists:** Screen all customers, beneficial owners, counterparty VASPs, and relevant transaction parties against:

**UN Security Council Consolidated List**

**OFAC SDN List** and other relevant OFAC lists (e.g., CSD list for cyber-related sanctions)

**EU Consolidated List of Persons, Groups and Entities Subject to EU Financial Sanctions**

**Methodology:** Screening must be performed at onboarding, upon updates to sanctions lists, and continuously (e.g., real-time transaction screening or periodic batch screening of customer databases).

Prohibit or flag transactions originating from or destined for sanctioned jurisdictions (e.g., Cuba, Iran, North Korea, Syria, Crimea, certain regions of Venezuela) as identified by UN, OFAC, and EU sanctions programs.

Exercise extreme caution with transactions involving high-risk jurisdictions identified by FATF or local authorities.

**Know Your Customer (KYC) and Customer Due Diligence (CDD):**

Implement robust KYC procedures to identify and verify the identity of customers, including beneficial owners, in accordance with Law 155-17.

Conduct enhanced due diligence (EDD) for high-risk customers, politically exposed persons (PEPs), and transactions involving high-risk jurisdictions or virtual assets with anonymity-enhancing features.

Monitor all crypto transactions for red flags indicative of money laundering, terrorist financing, or sanctions evasion (e.g., unusually large transactions, rapid fund movements, transactions with known illicit addresses, use of mixers/tumblers without legitimate business purpose, unusual geographic patterns).

**Suspicious Activity Reports (SARs):** Report any suspicious transactions or activities to the UAF, including those potentially linked to sanctioned entities or evasion.

**Freezing of Assets:** Immediately freeze assets of individuals or entities appearing on UN sanctions lists or as instructed by the UAF/competent authority. Report the freeze to the UAF.

Maintain records of customer identification data, transaction history, and risk assessments for at least 10 years, as required by Law 155-17.

**Travel Rule (FATF Recommendation 16):**

While not explicitly enshrined in DR law for VASPs yet, compliant VASPs should strive to implement the "Travel Rule" by exchanging originator and beneficiary information for crypto transfers above a certain threshold, in line with FATF guidance, especially when interacting with international VASPs that have adopted it.

**Under Dominican Law No. 155-17:**

**Criminal Penalties:** Imprisonment from 4 to 10 years, and fines ranging from 200 to 500 minimum wages, depending on the severity and nature of the offense. These can be increased for aggravating circumstances (e.g., organized crime, involvement of public officials).

**Administrative Penalties:** Obligated subjects failing to comply with administrative obligations (e.g., record-keeping, reporting) can face substantial fines from regulatory bodies (UAF, SIB).

Civil monetary penalties can range into millions of dollars per violation.

Criminal penalties can include fines of several million dollars and imprisonment for up to 30 years for willful violations.

These penalties can be imposed on non-U.S. persons who cause a U.S. person to violate sanctions, or whose conduct has a nexus to the U.S. financial system or economy.

Member states are required to set their own penalties, which can include significant fines and imprisonment.

**Implementing UN Sanctions:** The UAF, as the national authority, is responsible for circulating the **UN Security Council Consolidated List** to obligated subjects and ensuring its implementation within the country. This list includes individuals and entities sanctioned for terrorism, WMD proliferation, and other UN-mandated reasons. Any entity on this list, regardless of whether its assets are traditional or virtual, would be subject to asset freezes and prohibitions on financial dealings.

**No DR-specific crypto sanctions list:** There is no separate "Dominican Republic Crypto Sanctions List" analogous to OFAC's SDN list that targets specific virtual asset addresses, mixers, or illicit crypto entities identified solely by the Dominican Republic. Compliance is primarily driven by international lists and the general AML/CFT framework.

**Warnings and Advisories:** The **Central Bank of the Dominican Republic (Banco Central de la República Dominicana - BCRD)** has repeatedly issued public statements and communications warning about the risks associated with cryptocurrencies, stating that they are not legal tender, are not backed by any government or central bank, and are subject to high volatility and lack of regulation.

**Prohibition for Regulated Entities:** Financial institutions regulated by the BCRD and the **Superintendency of Banks (Superintendencia de Bancos - SB)** are generally prohibited from dealing in or offering services related to cryptocurrencies.

**Absence of a Specific Licensing Framework:** Unlike some other jurisdictions, the Dominican Republic does not currently have a specific regulatory framework for the licensing and supervision of cryptocurrency exchanges or related businesses. This means there isn't a specific set of crypto regulations for regulators to enforce against these entities.

**Regulator Name:** Banco Central de la República Dominicana (BCRD - Central Bank of the Dominican Republic)

**Entity Targeted:** General public, financial institutions, and implicitly, anyone considering engaging with cryptocurrencies.

**Violation Type:** While not a specific violation leading to a fine against a crypto entity, the BCRD consistently warns about the **lack of legal status, regulatory oversight, and inherent risks** of cryptocurrencies. For regulated financial institutions, engaging with crypto could be a violation of existing banking laws and regulations.

**Penalty Amount:** N/A (as this is a general warning, not a specific fine against an entity)

**Date:** Ongoing, with multiple communications issued over the past years, including within the last 3 years. A significant communication was issued in March 2021 and has been reinforced since.

**Outcome:** To inform the public of the risks and lack of backing for cryptocurrencies, and to reiterate that financial institutions under their supervision should not deal with them. This stance discourages the widespread adoption of crypto within the regulated financial system and informs potential users of the risks.

**Comunicado del Banco Central sobre las criptomonedas (March 25, 2021):** This is one of the most definitive statements from the Central Bank.

**Financial Intelligence Unit (UAF) - General Information:** While the UAF is responsible for AML/CFT, specific public administrative enforcement actions against crypto entities in the DR are not readily published on their site. Their role would typically be in identifying suspicious transactions.

https://uaf.gob.do/ (General UAF website, no specific crypto enforcement actions publicly listed for the last 3 years)