On-shore VASP in Mexico

Banxico: Regulates virtual assets for financial institutions; authorizes internal operations but bans client-facing custody.

CNBV: Supervises financial institutions' compliance.

AML/CTF Law (Ley Federal para la Prevención e Identificación de Operaciones con Recursos de Procedencia Ilícita): Classifies virtual asset operations by non-financial entities as vulnerable activities, requiring KYC, internal policies, transaction monitoring, and reporting to the Financial Intelligence Unit (FIU) for transactions over ~$58,000 MXN (645 UMAs) per client in six months.

Fintech Law (Ley para Regular las Instituciones de Tecnología Financiera): Defines virtual assets and grants Banxico regulatory powers but excludes non-financial custody from licensing.

Exchanges, Custody Providers, Payment Processors (Non-Financial Entities): No license or registration needed; services can be offered to the public if not reserved for regulated entities.

Financial Institutions/Fintechs: Authorization from Banxico required for any virtual asset operations; prohibited from public services.

No approvals granted by Banxico post-2019 secondary rules, with fines up to $47,000 for violations.

Capital: No specific minimum capital mandates in search results for virtual asset providers.

AML/KYC: Mandatory for all providers serving Mexican residents, including:

Local Presence: No explicit requirement, but company setup (if incorporating) needs Mexican notary, share certificates, corporate books, tax registry (RFC), e-signature, foreign investment registry (if applicable), and bank account. Office rental may aid compliance.

Submit to Banxico; review takes ~60 banking days.

No public process details for non-financial VASPs, as none required.

General company setup: Notary incorporation, RFC registration, bank account opening.

Security tokens: Those representing or underlying securities (e.g., tokenized stocks or bonds) fall under Securities Market Law scope.

Certain stablecoins: If issuers receive, manage, safeguard public funds, and enable redemption/transfer, they may fall under the Fintech Law (Ley para Regular las Instituciones de Tecnología Financiera, March 2018).

Other cryptoassets: Not formally classified; utility tokens staying on native platforms are typically outside regulation, while payment tokens can fulfill obligations if contractually agreed. Virtual assets are not legal tender or currencies.

Fintech Law (2018): Regulates FTIs handling virtual assets. https://www.diputados.gob.mx/LeyesBiblio/pdf/LIFT_200318.pdf

Federal AML Law (as amended 2018): Covers virtual asset transactions. https://www.diputados.gob.mx/LeyesBiblio/pdf/LFPIORPI_180818.pdf

Banco de México (Banxico): Central bank with primary authority to authorize and regulate virtual asset operations by financial institutions, prohibiting direct public sales or services like exchange, custody, or transfer; authorizations (taking ~60 banking days) are limited to internal operations only, with no risk transfer to clients.

National Banking and Securities Commission (CNBV): Supervises banks and fintechs for compliance and licensing.

Financial Intelligence Unit (FIU) and Ministry of Finance and Public Credit (SHCP): Enforce AML/CTF reporting for transactions above thresholds; SHCP oversees broader AML/CTF implementation.

Law to Regulate Financial Technology Companies (Fintech Law), enacted March 9, 2018: Defines virtual assets as electronically registered value representations used for payments (not legal tender); empowers Banxico to regulate and authorizes AML/CTF extensions; requires risk disclosures.

Circular 4/2019 (Banxico): Limits financial entities to internal virtual asset operations with prior approval; bans public-facing services.

Mexico is listed among jurisdictions (including Colombia, Ghana, Kenya, Morocco, Nicaragua, Nigeria, Peru, Saudi Arabia, Tanzania, Thailand, and Ukraine) that have taken strides toward Travel Rule frameworks but have not yet brought them fully live.

Individuals: Progressive rates from 1.92% to 35% on net gains (disposal proceeds minus inflation-adjusted acquisition cost, using FIFO, identified cost, or average cost methods); no loss deductions allowed; annual exemption on movable property gains up to MXN 1,829,811.95 (~USD 90,000–100,000, varying by source and year).

Corporations: Flat 30% rate on all income, including crypto; monthly advance payments based on profit quotient; accrual basis recognition.

OFAC (Sept 26, 2023): Sanctioned Mario Alberto Jimenez Castro (Sinaloa Chapitos faction) for laundering via cryptocurrency. Elliptic

U.S. authorities (Nov 20, 2024): Seized $5.4M in three wallets (one VASP) for cartel money laundering. Same source.

U.S. authorities (Mar 17, 2023): Arrested Sergio Antonio Duarte Frias (Sinaloa) in Guatemala for laundering $869K narcotics proceeds via cryptocurrency. Same source.