Remote VASP serving residents in Ecuador

Superintendencia de Compañías, Valores y Seguros (SCVS): The superintendency responsible for regulating companies, securities, and insurance. This body would classify tokens as securities.

Banco Central del Ecuador (BCE): The Central Bank, which has historically taken a very strict stance against cryptocurrencies being used as means of payment.

Payment Tokens / Cryptocurrencies (e.g., Bitcoin, Ethereum): These are generally not considered "securities" in the traditional sense, but their use as legal tender or alternative currency is explicitly prohibited by the Banco Central del Ecuador. Financial institutions are barred from facilitating transactions with them. This prohibition makes their status in Ecuador highly problematic, regardless of whether they are securities.

Registration with SCVS: Mandatory registration of the offering and the issuer with the Superintendencia de Compañías, Valores y Seguros.

Prospectus Requirements: Preparation and submission of a detailed prospectus containing comprehensive information about the issuer, the project, financial statements, risks, and the rights associated with the token.

Information Disclosure: Ongoing periodic and material event disclosures to the SCVS and the public.

Regulated Exchanges: Secondary trading of registered securities typically must occur on regulated stock exchanges (Bolsas de Valores) authorized by the SCVS.

Broker-Dealer Registration: Entities facilitating the trading of such tokens would need to be registered as broker-dealers (casas de valores) with the SCVS.

These exemptions are highly specific and would need to be rigorously adhered to; there are no specific "crypto-token" exemptions.

Resolución No. UAFE-DG-2022-0001 (Resolution No. UAFE-DG-2022-0001)

Unidad de Análisis Financiero y Económico (UAFE) - The Financial and Economic Analysis Unit.

Identification and Verification of Customer Identity:

Natural Persons: Obtain and verify full name, date of birth, nationality, identification number (e.g., cédula, passport), address, contact information, occupation/activity. Verification usually requires official documents.

Legal Entities: Obtain and verify legal name, registration number, date of incorporation, legal form, address of registered office, names of directors/partners/shareholders, and identification of individuals authorized to act on behalf of the entity. Verification requires official registration documents.

Beneficial Ownership (BO) Identification:

Purpose and Intended Nature of the Business Relationship:

Continuously monitor customer transactions and activities to ensure they are consistent with the VASP's knowledge of the customer, their business, and risk profile.

Regularly update customer information and documentation.

Develop and implement a risk assessment framework to identify, assess, and mitigate ML/TF risks.

Apply enhanced due diligence (EDD) for higher-risk customers (e.g., Politically Exposed Persons - PEPs, customers from high-risk jurisdictions, complex or unusually large transactions, new technologies and products that favor anonymity).

Reporting Obligation: Any transaction, attempted transaction, or activity that raises suspicion of money laundering or terrorist financing, regardless of the amount, must be reported.

No Tipping-Off: VASPs and their employees are prohibited from disclosing to the customer or any third party that a report has been or will be submitted to UAFE.

Reporting Mechanism: Reports are typically submitted through UAFE's electronic system (SARLAFT system).

Transaction Records: All details of virtual asset transactions (e.g., amount, type of virtual asset, sender/recipient addresses, timestamps, fiat currency equivalents, transaction hashes).

Adopted: Yes, the FATF Travel Rule has been adopted in Ecuador.

Travel Rule Threshold: UAFE Resolution No. UAFE-DG-2023-0002 (Article 10) mandates the collection and transmission of originator and beneficiary information for virtual asset transfers that exceed the value of five hundred United States Dollars ($500 USD) or its equivalent in other currencies.

Information Collection: For transactions exceeding the $500 USD threshold, VASPs must obtain and maintain the following information (Article 10):

Record Keeping: VASPs are required to keep records of this information for at least 10 years (Article 11).

Administrative Sanctions: The UAFE, as the supervisory authority, can impose administrative sanctions on VASPs that fail to comply with their obligations (Article 33 of the Organic Law). These can include:

Temporary Suspension of Activities: For serious or repeated infractions.

Definitive Closure/Revocation of Registration: In the most severe cases, particularly for repeated non-compliance or involvement in illicit activities.

Criminal Penalties: Beyond administrative sanctions, severe breaches (e.g., direct involvement in money laundering or terrorism financing) can lead to criminal charges under the Código Orgánico Integral Penal (Organic Comprehensive Criminal Code), with penalties including imprisonment and larger financial penalties.

Legal Basis: Resolution 014-2014-M (or its subsequent reiterations) issued by the Monetary and Financial Policy and Regulation Board (Junta de Política y Regulación Monetaria y Financiera) and implemented by the Central Bank of Ecuador (BCE). This resolution, dated July 28, 2014, effectively banned private cryptocurrencies, stating that they are not recognized as legal tender and cannot be used as a means of payment within the country.